Arroyo missed own jobs target

By Karen Flores,

Posted at Jul 28 2009 02:27 AM | Updated as of Aug 06 2009 08:29 PM

16th in a series on GMA's 9th State of the Nation Address

MANILA - In her last State of the Nation Address (SONA) on Monday, President Arroyo proudly announced that her government created 8 million jobs for the past 8 years.

Lumikha tayo ng walong milyong trabaho (We generated 8 million jobs), an average of a million per year, much, much more than at any other time,” she boasted last Monday before an audience of legislators, businessmen, diplomats, and other groups.

Job creation—one of the key measures of a government’s ability to empower and keep its people contented with their leaders—has been high on the priority list of President Arroyo when she assumed power in 2001. At that time, she wanted to reverse the “jobless growth” issue that plagued her predecessor’s shortened term.

In 2001, she promised to create 1 million jobs every year. Based on the labor department and statistics office's computation of 8 million jobs for the past 8 years, she has achieved this. (Read Erratum on SONA jobs numbers)

In 2004, however, she set another target for jobs creation: 10 million new jobs for her 2004 to 2010 term. Since then, her government has created only 4.9 million in the domestic market.

The lack of enough jobs at home, however, was compensated by rich countries absorbing our labor exports.

One million per year

In her first SONA, she proclaimed that “We will approach this with a sense of urgency,” referring to the country’s unemployment concerns then.

Eager to prove her leadership prowess upon replacing deposed President Joseph “Erap” Estrada, President Arroyo vowed to generate 1 million jobs in the agriculture and fisheries sectors by the end of 2001.

To pull off such an ambitious feat, she even appointed former Agriculture Secretary and multi-millionaire Luis “Cito” Lorenzo as the secretary for One Million Jobs Creation. While the new position sent the message she was serious in reforming the investment environment in the country, this also sidelined the labor secretary who is already part of her cabinet.

“I do not want the 1 million new jobs to come in the long term. I want a timetable. I want to identify accountabilities. I want milestones," President Arroyo said in her 2001 SONA.

The Arroyo government managed to generate 1.7 million jobs in 2001, exceeding the President's set target for the said year. (Read Erratum on SONA jobs numbers)

10 million by 2010

After President Arroyo was elected in 2004, she announced her 10-point agenda for her new 6-year term. She committed to provide 10 million jobs for the next 6 years, which translated to a higher target: about 1.6 million jobs a year.

But as the end of her term nears, her jobs promise has yet to bear fruit.

Arroyo missed own jobs target 1

According to the Office of the President’s official website, 9.78 million jobs were generated under the Arroyo administration from 2004 to 2008. But this included not just jobs created at home, but also overseas.

Data from the NSO, which releases employment and unemployment data every quarter, showed that there were about 4.9 million jobs generated in the Philippines from 2004 to April 2009. (Read Erratum on SONA jobs numbers)

Considering the effects of the economic crisis on Philippine employment, it is unlikely for the government to provide an additional 5.1 million jobs by next year to reach Mrs. Arroyo's 10-million jobs target. computed the total jobs generated per year by subtracting the average number of employed persons based on NSO’s quarterly data from the year before.

Investments, unemployment rate

The missed jobs targets are largely due to the government’s inability to attract more businessmen to invest in ventures that create employment. 

In particular, foreign investments were low. During the past 8 years under President Arroyo, the Philippines only attracted a yearly average of $1.5 billion in foreign direct investments, significantly lower compared to its neighbors in Southeast Asia.Arroyo missed own jobs target 2

To be fair to the President, she has managed to lower the country’s unemployment rate to 7.5% as of April 2009 from 11.4% at the start of her term.

Still, this remains worse compared to its Asian peers with average jobless rates between 1% and 6%, according to a report from the Asian Development Bank.

Deteriorating quality

The over 6 million jobs generated during President Arroyo’s term were not only insufficient, but also of poor quality.

According to University of the Philippines (UP) professor and former agriculture undersecretary Arsenio Balisacan, the government has painted a “deceiving” picture of the state of employment in the country.

On top of the existing unemployed individuals, Balisacan said Mrs. Arroyo’s jobs program could not cater to the growing number of new entrants in the country’s labor force.

“Basta one hour every week ka nagtratrabaho, employed ka na (As long as you get to work for one hour every week, you’re already considered employed). The numbers are deceiving,” he told, adding that the NSO’s concept of self-employment has yet to be clarified.

As a result of the government’s failure to provide quality employment, UP professor and former budget secretary Benjamin Diokno said most Filipinos had no other choice but to look for job opportunities abroad.


The growing number of overseas Filipino workers (OFW) has led to the rise of remittance inflows to the country. Even during times of political and economic instability, OFWs continue to send money to their loved ones at home, fueling consumption in the local economy.

These remittances essentially masked the lack of available decent jobs, which, in typical economies, stimulate a domestic economy when citizens spend their salaries or earnings from entrepreneurial ventures.

Economists observed that the Arroyo administration, compared to her predecessors, is the most dependent on remittances. Such dependency came at the expense of local talent. As more people opt to look for jobs abroad, the Philippines is robbed of growth opportunities from inputs of potentially skilled workers.

The global economic crisis, however, displayed how fragile the Philippines can become when it depends too much on the ability of other economies to absorb our excess labor supply.

Nonetheless, it may just be the jolt that could give a lesson on how important is the basic task of improving business and investment climate at home on top of improving labor export policies.