Slim pickings in a surging economy

With a growth rate of 7.8pc, the Philippines is winning accolades but stubbornly high unemployment and poverty take the shine off the figures

PUBLISHED : Monday, 24 June, 2013, 12:00am
UPDATED : Monday, 24 June, 2013, 4:59am
NYT

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At his vegetable stand on a busy street in the Philippine capital, Lamberto Tagarro is surrounded by gleaming, modern skyscrapers, between which a river of luxury vehicles flows.

"The Philippines is the rising tiger economy of Asia," Tagarro said. "But only the rich people are going up and up. I'm not feeling it."

Tagarro earns the equivalent of about US$5 a day working from before dawn until after dark, battling petty corruption to maintain his improvised footpath stand and dealing with increasing wholesale prices for the onions and tomatoes that he sells.

The Philippines, with a 7.8 per cent expansion of gross domestic product in the first quarter of this year, has the fastest-growing economy in East Asia, surpassing even China's.

The country has a red-hot stock market, a strong currency and a steady stream of accolades and upgrades from international ratings agencies.

But Tagarro's experience - of being left behind by the country's newfound prosperity - mirrors that of many Filipinos, according to the latest government poverty and employment data.

An estimated seven million Filipinos, about 17 per cent of the workforce, have gone overseas in search of jobs, according to the Asian Development Bank. For those who stay home, there are few options.

Despite the rapidly expanding economy, the country's unemployment rate increased to 7.5 per cent in April, from 6.9 per cent at the same time a year earlier. About three million Filipinos who want to work are unemployed.

"Higher rates of economic growth over recent years have not made a serious dent in the employment problem in the Philippines," the Asian Development Bank said in its recent Asian Development Outlook report.

President Benigno Aquino ran on a platform of clamping down on corruption, improving the business environment and addressing widespread poverty. In his first three years in office, Aquino removed high-level government officials accused of corruption, cracked down on tax evaders and aggressively courted foreign investment.

Although Aquino's efforts to improve the economy have drawn high-profile praise, he has had less success in addressing the country's widespread poverty.

Indeed, Aquino's political opponents argued in advance of recent legislative elections that his actions had further enriched the wealthy and left the poor behind.

The Philippines still has a strong service sector. In 2011, it overtook India as a top provider of offshore call centres. But the country lacks the manufacturing base that has lifted millions of people out of poverty in other Asian countries.

In countries like China, the rural poor increased their income by finding jobs in factories. That is rarely an option in the Philippines, and few poor people from the countryside are qualified to work in a call centre.

The country's latest poverty data, released in April, show almost no improvement in the past six years. About 10 per cent of Filipinos live in extreme poverty, unable to meet their most basic food needs. This is the same figure as in 2006 and 2009, the previous years when poverty figures were gathered, according to the National Statistical Co-ordination Board. The board also estimated that 22.3 per cent of families were living in poverty in the first four months of last year.

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