PH industry’s revival for the long haul?

MANILA, Philippines – All the doubts cast on the strength of the country’s industry sector may have been thrown out the window as the sector continued to strengthen in the first quarter of 2013. 

The Industry sector has been growing in importance to the Philippine economy. In the 4th quarter of 2012, the sector’s growth outpaced that of the Services sector, something that has continued in the first quarter of 2013. 

And National Economic and Development Authority (NEDA) Deputy Director General Emmanuel Esguerra believes that Industry’s rise can be sustained given the possible recovery in the United States. 

Gallup’s recent U.S. Economic Confidence Index was at minus 6, the most upbeat U.S. consumers have been since the think tank began tracking U.S. economic confidence daily in 2008.

“I think so,” Esguerra said via SMS on Thursday, May 30, when asked if Industry’s growth will continue. He cited “the general optimism plus the anticipated US recovery.”

In the 1st quarter, the Industry sector grew 10.9%, the highest growth it has posted under the Aquino administration. The growth was driven mainly by Construction, which posted a growth of 32.5%  during the period, and Manufacturing, which grew 9.7%. 

Industry accounted for as much as 3.5 percentage points of the country’s 7.8% Gross Domestic Product (GDP) growth. 

“As you have seen, industry has performed quite well during the 1st quarter such that the share of personal consumption expenditure in our total economy declines in relative terms,” Socioeconomic Planning Secretary Arsenio Balisacan said. 

“I think the bottomline is, our economy is diversifying. It’s moving away increasingly [from] its heavy dependence on personal consumption expenditure and that should be good for the stability of our growth,” he added. 

In terms of growth rates on the expenditure side of GDP, the growth of construction and government consumption outpaced that of household consumption. 

While household consumption still accounted for as much as 3.6% of the country’s GDP, it only grew 5.1% in the 1st quarter. 

Construction expenditures and government spending moved ahead of the curve with double digit growth rates of 33.7% and 13.2% in the January-to-March period. 

Where the jobs are

The industry sector is composed of Manufacturing, Construction, Mining and Quarrying, and Electricity, Gas and Water Supply. This sector, apart from Agriculture, is a labor intensive industry that could boost employment, especially in generating quality jobs.

But where are the jobs? The answer: they’re coming. 

Balisacan said it is not easy to say that the robust industry sector is going to immediately translate into jobs. But, he said with a growth of 7.8% in the first quarter, it is the government’s hope that the country will see some reduction in unemployment figures that will be released in July.

The National Statistics Office (NSO) releases the Labor Force Survey results periodically, with the last survey release in January. It showed that there were 2.89 million Filipinos without jobs, equivalent to about 7.1% of the Philippine labor force. 

View – INFOGRAPHIC: The Filipino worker

Balisacan said, however, that the public cannot expect a dramatic improvement in the numbers since reducing unemployment takes time. For one, Balisacan said, the government needs to create 1 to 2 million jobs every year to provide enough employment to existing jobless Filipinos and new entrants to the labor force. 

“We should see (some immediate improvement) but you don’t expect a dramatic improvement because the reality is, you need to get investments. You need to get the private sector (to) believe in the Philippine economy,” Balisacan said. – Rappler.com