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Second year of slowing growth a wake-up call – IBON

Research group IBON said that the second year of slowing growth under the Duterte administration should be enough to jolt it out of its complacency and denial. The downturn in the last two years and the poor prospects in the year to come should be a wake-up call to start to undertake the difficult but necessary reforms for genuinely inclusive growth and national development.

The Philippine Statistics Authority (PSA) reported a 6.2 percent annual growth in the country’s gross domestic product (GDP) for 2018, lower than government’s revised growth target of 6.5-6.9 percent for the year.

Government cited slowing agriculture and high inflation as among the main factors pulling back growth, while the main drivers were growth in construction, and trade and repair of motor vehicles, motorcycles, personal and household goods.

“Growth is slowing most of all because of the economy’s unsound fundamentals in backward agriculture and shallow industry,” said Sonny Africa, IBON executive director.

The agriculture sector registered just 0.8 percent growth in 2018 from 4 percent in 2017.

This is the sector’s worst performance since its contraction in 2016.

Yet, Africa said, the administration seems to have little interest in reversing this trend.

For example, the Php49.3 billion agriculture department budget for 2019 proposed by Congress is Php1.4 billion less than the Php50.7 billion in 2018 (in equivalent cash-based terms).

Africa also noted that manufacturing growth slowed to 4.9 percent in 2018 from 8.4 percent the year before, which is the slowest since the 4.7 percent growth in 2011.

He said that this is due to weaker demand in domestic consumption and weaker exports amid the global economic slowdown. Manufacturing also remains shallow in being low value-added, foreign-dominated, and dependent on foreign capital and technology.

Africa pointed out that recent rapid growth has instead relied on external short-term factors that are fading. Yet remittances are slowing, exports are falling, and interest rates are rising. The real estate and consumer spending booms are also petering out.

Growth in overseas remittances slowed from 5.0 percent in 2016 to 4.3 percent in 2017 to just 3.1 percent in the first 10 months of 2018, said Africa.

Exports growth increased from 11.6 percent in 2016 to 19.5 percent in 2017, but then fell to 11.5 percent in 2018.

Meanwhile, the benchmark overnight reverse repurchase (RRP) rate rose steeply from 3.0 percent in 2017 to 4.8 percent by end-2018, reversing the decade-long general decline in interest rates.

Africa also said that household consumption spending markedly slowed from 7.1 percent growth in 2016 and 5.9 percent in 2017 to just 5.6 percent in 2018.

The real estate boom is also tapering with 2016 growth of 8.9 percent in real estate, renting and business activities declining to 7.4 perent in 2017 and falling further to just 4.8 percent in 2018.

“Rising government spending and its infrastructure offensive haven’t been enough to offset the reliance on waning external factors,” said Africa. “The administration’s efforts to stimulate growth to its 7-8 percent target with even more spending, are not going to be enough amid high disguised unemployment, low incomes, and the global slowdown this year.”

Global GDP growth is estimated to slow from 3.1 percent in 2018 to 3.0 percent this year.

“The Duterte administration needs to stop downplaying slowing growth and hyping that this as still among the fastest in the region and the world because the growth is becoming more jobless than ever,” Africa said.”

The number of employed only increased by 162,000 from 41 million in 2016 to 41.2 million in 2018, according to data from the Philippine Statistics Authority (PSA).

Average annual job creation was then only 81,000 in the period 2017-2018, which is the lowest level of job creation among post-Marcos administrations.

Africa said that government continues to ignore telltale signs of an economic downturn and deceive Filipinos with its rosy picture of the economy.

He said that the sooner the administration admits the failure of its neoliberal policies, the sooner measures that will spur domestic industries and benefit the Filipino people can be implemented. #

2018 inflation highest in 10 years amid slowing growth — IBON

Inflation for 2018 is more than double the Duterte administration’s original inflation target for the year and the highest in a decade, research group IBON said.

Along with slowing economic growth, this further points to the failure of government’s economic managers to rein in consumer prices and of its neoliberal policies, such as the Tax Reform for Acceleration and Inclusion (TRAIN), which continue to burden the poorest Filipino families, said the group.

The reported annual average inflation rate rose to 5.2 percent in 2018 from 2.9 percent in 2017 and 1.6 percent in 2016.

IBON noted that this is much higher than the government’s original annual inflation projection of two to four percent for 2018 and the highest since the 8.2 percent rate in 2008.

Aside from missing its inflation target, the government is also facing an economic slowdown.

The economic growth target for 2018 has already been adjusted downwards from 7-8 percent to 6.5-6.9 percent.

The gross domestic product growth rate already slowed to 6.3 percent in the first three quarters of 2018 from 6.7 percent in 2017 and 6.9 percent in 2016.

Inflation eased last December to 5.1 percent but the poorest half of the population still saw their real income erode by anywhere from Php3,300 to Php7,300 from the high inflation throughout 2018.

Rising prices always spell more difficulty for the poor especially amid low or even stagnant incomes, IBON said.

The Duterte administration should also not be too quick to take credit for the lower year-end inflation, IBON added.

The biggest factor easing inflation is not anything the government has done but rather falling global oil prices from increased supply amid a global economic downturn.

On the contrary, the Duterte administration’s insistence on TRAIN’s second tranche of fuel excise taxes adds inflationary pressure, the group said.

The economic managers will fallaciously claim that relatively slower inflation in the first few months of 2019 proves that TRAIN and the additional fuel excise taxes are not inflationary, IBON said.

Such dismissiveness of how TRAIN makes consumer goods and services more expensive however only affirms the government’s insensitivity to the plight of the Filipino people, especially the poor.

IBON said that poor Filipino families worst affected by last year’s high prices will continue to carry the burden of these into the new year if government does not take genuine measures to curb inflation and arrest a faltering economy.

The government can start with repealing TRAIN and implementing a progressive tax system. #

2018 Yearender: Are You High? The Economy Isn’t

by Sonny Africa

Executive Director, IBON Foundation

The Duterte administration’s economic managers made some odd statements as the year wound up. Economic planning secretary Ernesto Pernia said “the Philippine economy became stronger and even more resilient than ever”. Finance secretary Carlos Dominguez III insisted on “the soundness of the Duterte administration’s economic development strategy”. Bangko Sentral ng Pilipinas (BSP) governor Nestor Espenilla meanwhile said that they “expect growth to remain solid in the years ahead”.

These are odd because the economy clearly showed signs of increasing stress in 2018. If anything, the year just passed confirmed the end of the long period of relatively rapid growth for the Philippines.

In denial

Growth has been slowing since the start of the Duterte administration. It is already its slowest in three years. Inflation reached a nine year-high and was even worse for the poorest Filipinos. The current account deficit is at its worst in 18 years. The peso is at its weakest in 13 years. International reserves are in their lowest in 10 years. The jobs crisis is disguised but really at a historic high. Overseas remittances are also slowing — this further dampens household consumption and welfare.

The government seems to think that it can just spend its way out of this. It holds its ‘Build Build Build’ infrastructure offensive as some kind of magic bullet. This will be difficult with the end of the decade of low global and local interest rates and rising borrowing costs. Accelerating government debt will also only become more unmanageable as growth continues to slow. As it is, the budget deficit is already at its worst in seven years.

All these the government’s chief economic propagandists will euphemistically call ‘headwinds’ or ‘challenges’. Yet barring a real change of economic course, there is little reason to expect that the economy will get better anytime soon. Elite business profits will likely continue to grow, but it may just be a matter of time before even these suffer.

As if being near the top of a sinking ship is a good thing, the administration will keep on claiming that the Philippines is among the fastest growing economies in the region and in the world that is caught in a protracted crisis, Still, the 6.3% growth in the first three quarters of 2018 is markedly slower than the 6.7% growth on 2017 and 6.9% in 2016.

Deteriorating

Agriculture is doing particularly badly: its 0.4% growth in the first three quarters of 2018 is approaching its worst performance since 2016. But even the hyped manufacturing resurgence is hitting a wall – the 5.7% growth in the first three quarters is much slower its 8.4% clip in 2017, and the full year results may be the slowest since 2015.

Filipino industry and domestic agriculture would have been solid foundations of domestic demand and production, if only these had really been developed these past years. This is impossible though under the government’s obsolete globalization and free trade mantra. Agriculture is still left to the vagaries of the weather and small peasant labor. Manufacturing remains shallow and foreign-dominated.

The services sector never should have been the driver of economic growth. But even this is failing. The real estate boom appears to be ending with 5.9% growth of finance and real estate in the first three quarters of 2018 continuing the trend of slowing growth from 7.5% in 2017 and 8.5% in 2016. Reflecting weakening household consumption, even trade is down – at just 6.0% in the first three quarters compared to 7.3% in 2017 and 7.6% in 2018.

The main drivers of growth in 2018 have been the intrinsically short-term boost from government spending – this increased to 13.1% growth in the first three quarters from just 7.0% in 2017. , Construction also increased to 13.3% growth in the first three quarters from just 5.3% in 2017.

Real score on jobs twisted

The worst effect of a backward economy is not creating enough decent work for the growing population.

The economic managers hailed 825,000 new jobs created in 2018 and unemployment falling by 140,000 bringing the unemployment rate down to 5.3 percent. Unfortunately, these do not tell the whole story.

The Duterte administration has actually created just an average of 81,000 jobs annually with 43.5 million jobs in 2018 compared to 43.4 million in 2016. This is because the economy lost a huge 663,000 jobs in 2017, which was the biggest contraction in employment in 20 years or since 1997.

So the largest part of the supposed job creation, or some four out of five ‘new’ jobs, was really just restoring jobs lost in 2017.

But how to explain the falling unemployment? This is a statistical quirk. According to the official methodology, jobless Filipinos have to be counted as in the labor force to be counted as unemployed.

It seems that huge numbers of Filipinos are no longer seeking work and dropping out of the labor force. This is reflected in how the labor force participation rate dropped to 60.9% in 2018 which is the lowest in 38 years or since 1980.

While employment grew by just 162,000 between 2016 and 2018, the number of workers not in the labor force grew by a huge 2.9 million over that same period. It is likely that the reported 62,000 fall in the number of unemployed between 2016 and 2018 reflects workers dropping out of the labor force because of tight labor markets rather than their finding new work (because of weak job creation).

This scenario is supported by IBON’s estimates of the real state of unemployment in the country. The government started underestimating unemployment in 2005 when it adopted a stricter definition that made subsequent estimates incomparable with previous figures.

Reverting to the previous definition to give a better idea if the employment situation really is improving or not, IBON estimates that the real unemployment rate in the decade 2008-2017 is some 10.2 percent. This maintains high unemployment in the economy since the onset of globalization policies in the 1980s. IBON does not yet have estimates for 2018, but the real number of unemployed in 2017 was 4.6 million or almost double the officially underreported estimate of just 2.4 million.

Job generation trends in 2018 are in any case worrisome as it is. The quarterly labor force survey showed drastically worsening job generation since the start of the year. Measured year-on-year, some 2.4 million jobs were reported created in January 2018 but this fell to 625,000 in April then 488,000 in July and then 218,000 jobs actually lost, rather than created, in October.

Economy needing rehab

Perhaps high on their own propaganda, the country’s neoliberal economic managers continue to confuse abstract growth figures, business profits and foreign investment with development and the conditions of the people. The reality however is of chronically backward Filipino industry and agriculture and an economy that went sideways in 2018. The real challenge is to discard failed neoliberalism and to replace this with an economics truly serving the people.#

TRAIN still inflationary with lifting of fuel excise suspension

Research group IBON said that government’s continued implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) means that TRAIN’s taxes will keep raising prices next year and make inflation higher than it should be.

The group said that lifting the fuel excise tax suspension shows the Duterte administration’s insincerity and insensitivity in addressing the inflationary impact of the tax reform program, particularly on poor Filipino households.

The administration’s interagency Development Budget Coordination Committee (DBCC) recently announced its plan to recommend that the second tranche of fuel excise tax be implemented, backpedaling on its previous suspension proposal.

The DBCC cited the lowering of Dubai crude oil prices and consideration of possible foregone revenues as reasons for its latest recommendation.

IBON however said that not going through with the suspension means new inflationary pressure next year from the second round of oil excise taxes in January 2019 on top of the now built-in additional prices from the first round in January 2018.

The liquid petroleum gas (LPG) excise tax of Php1.00 per kilogram (kg) in 2018 increases to Php2.00/kg in 2019, and Php3.00/kg in 2020. Diesel excise tax of Php2.50/liter in 2018 increases to Php4.50/liter in 2019, and Php6.00/liter in 2020.

Kerosene excise tax of Php3.00/liter in 2018 increases to Php4.00/liter in 2019 and Php5.00/liter in 2020.

The gasoline excise tax meanwhile is set to increase from Php7.00/liter in 2018 to Php9.00/liter in 2019 and Php10.00/liter in 2020.

IBON said that another fuel excise tax hike further increases costs of production. This will create a domino effect that will sustain the high prices of goods and services that many Filipinos, especially the poor, suffered this past year.

IBON estimates that the poorest 60 million Filipinos have already endured real income losses of anywhere between Php2,500 to Php6,800 due to worsening inflation since the onset of 2018.

The group added that it is premature to think that oil prices are going to stay low or that the peso will not continue to depreciate.

Oil prices remain volatile and could still increase next year with US sanctions on Iran gaining traction, possible Organization of Petroleum Exporting Countries (OPEC) production cuts, and untoward geopolitical events.

IBON insisted that the administration can do much to moderate inflation by suspending the inflationary taxes of TRAIN package 1.

IBON said that government should stop imposing higher consumption taxes such as the fuel excise which burdens the majority of poor Filipinos who can ill afford this amid low wages and growing joblessness. 

 

Instead, the government should improve revenue collection by cracking down on tax evaders and corruption in the Bureau of Internal Revenue (BIR) and Bureau of Customs (BOC). 

 

It should also build a tax system that raises revenues more from higher income, wealth and property taxes on the rich.#

Php18,855 already lost–Jeepney drivers among biggest losers from TRAIN’s oil taxes

Research group IBON said that jeepney drivers and their families have suffered huge income losses from rising pump prices on top of facing rising prices of basic goods and services.

The initial and impending fare hikes give immediate relief but only temporarily.

Fare hikes only worsen the burden on commuters and the government needs to take a broader view of the situation including taking both short and longer-term measures.

Jeepney drivers have lost a total of Php18,855 from start of the year until September because of the oil excise tax under the first package of TRAIN and rising global oil prices.

TRAIN is to blame for around Php13,104 of this amount, said IBON.

The estimated cumulative Php18,855 loss in the first nine months means an average loss in income of Php2,095 monthly, IBON explained.

Jeepney drivers and operators petitioned for a Php2 fare increase to help the sector cope with the rising prices of goods and services and the impact of TRAIN.

IBON however said that the fare hikes are still not enough to compensate for drivers’ income losses since the start of the year.

Driver’s incomes fell drastically in the first six months of the year.

The provisional Php1 jeepney fare hike in July compensated for pump price increases in July and August but was not enough in September when their incomes again fell as pump prices rose.

Even the full Php2 jeepney fare hike to be implemented this November, which includes the July Php1 fare increase, will not be enough to restore their earnings to pre-TRAIN levels.

IBON estimated the income losses of drivers assuming 200 passenger trips and 20 liters of diesel consumed daily, prevailing fares, and incorporating expenses for maintenance and other miscellaneous expenses.

Monthly incomes from January to September were compared to that in December 2017 as the baseline income.

IBON pointed out that the government’s narrow focus on fare hikes is pitting jeepney drivers against the riding public.

Both already bear the brunt of relentless price increases not just of oil but also of other commodity items including food, said the group.

The interest of both drivers and commuters is better served by giving greater attention to the drivers of inflation. “Suspending TRAIN’s oil excise taxes immediately starting with those implemented in January 2018 will give immediate relief to jeepney drivers and consumers,” IBON executive director Sonny Africa said.

“The additional oil excise taxes in January 2019 should also be suspended so as not to add to already considerable inflationary pressures,” he added.

“Further fare hikes can be prevented and a rollback may even be possible if oil firms’ overpricing is reined in,” said Africa.

 

“The long-term solution should include fuller and more responsible regulation of the oil industry,” he concluded. #

Suspend rate hike, scrap concession agreement with water firms, govt told

The Water for the People Network (WPN) said that government should not accede to the ruling of an international arbitral court granting the Maynilad Water Systems, Inc. petition to collect its corporate income tax (CIT) from consumers. 

The water rights group agreed that any impending water rate increase amid the ongoing dispute on pass-on CIT should be deferred.

The group likewise urged the scrapping of the concession agreement (CA), which it said allows onerous grounds for price hikes.

The Singaporean Supreme Court finalized an International Chamber of Commerce (ICC) arbitration decision that Maynilad may recover its CIT through pass-on charges.

Maynilad has demanded that the Philippine government pay Php3.4 billion in indemnification for non-recovery of its CIT for the period March 11, 2015 to August 31, 2016.

This is after the Metropolitan Waterworks and Sewerage System Regulatory Office (MWSS-RO) refused to honor an arbitral decision favoring Maynilad while that for Manila Water remained pending.

As per CA with the Philippine government, both Maynilad and Manila Water took to international arbitration in 2013 to contest the RO’s rejection of their petitioned rate increases for the rate rebasing period of 2013-2018.

The firms’ petitions included CIT recovery and other expenses unrelated to the delivery of water services.

For the period of 2018-2022, the MWSS Board has already approved the RO’s rate rebased tariffs, which again reportedly disallows CIT recovery. The MWSS-RO announced a staggered Php5.73 per cubic meter (cu. m.) rate increase for Maynilad and Php6.22/cu. m. for Manila Water.

These are lower than the firms’ petitioned rates, wich for Maynilad still included the CIT.

The WPN urged the MWSS Board in a letter to uphold the decision to prohibit CIT recovery because it is unjust to consumers.

“In the first place, it is very wrong to pass on the burden of paying the CIT to consumers,” said the group.

The concessionaires are technically public utilities providing a very basic need such as water, said WPN. Aside from mandating the periodic alteration of basic charges through rate rebasing, the CA ensures the concessionaires’ steady flow of revenue and profit-making with other increases based on inflation, an environmental charge, and value added tax, noted the group.

WPN supports the MWSS-RO plan to suspend the impending rate hike this year should Maynilad insist on collecting indemnification from the government.

“The amount being demanded by Maynilad alone could reach Php40 billion, tantamount to an increase of about Php5.00/cu. m. on current average tariffs. Any rate hike today is also insensitive due to the soaring prices of goods and services,” said the group.

Inflation has risen to 6.7 percent in September from 6.4 percent in August.

Aside from pushing for the prohibition of the CIT and rate hike suspension, WPN stressed that strategically, government should review and repeal the CA altogether.

 

“It is the basis of the enrichment of private water firms at the expense of consumers. Government should instead ensure control over water resources to have these safe, accessible and affordable for the public,” WPN said. #

Inflation worsening: Gov’t should act fast as households’ incomes hemorrhage

Research group IBON said that inflation has not tapered off as government projected but has accelerated in September, highlighting government’s continued neglect in addressing rapidly rising prices of goods and services.

The group said that government continues to push failed neoliberal measures, while feigning concern for Filipino families struggling with a quickly falling purchasing power.

Sonny Africa, IBON executive director, said, “The purchasing power of Filipino families continues to fall because the Duterte administration is more concerned about managing the political backlash of rising prices than genuinely addressing the burden on the country’s poorest families.”

The Philippine Statistics Authority (PSA) reported that the headline inflation rate accelerated to 6.7 percent year-on-year in September 2018, higher than the 6.4 percent in August.

Africa said that this is also more than double the 3.0 percent in the same period last year and over five times the 1.3 percent in June 2016 at the start of the Duterte administration.

The inflation rate for the poorest 30 percent of families is however likely even higher and some 8.5 percent or more.

Africa said that inflation has not moderated because the government refuses to suspend implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law or to implement price ceilings on basic necessities and prime commodities.

“Doing these would have sent a strong signal of the administration’s sincerity in addressing rising prices and would bring immediate relief for tens of millions of Filipinos,” stated Africa.

Instead, inflation has already eaten up thousands of pesos in the purchasing power of the incomes of the poorest households who are already under-consuming and have low standards of living as it is.

Africa estimated that each of the country’s poorest 30 percent of households have lost at least Php1,800 to Php2,916 already from the start of the year until September due to inflation.

These are households assumed to be earning some Php12,835 or less monthly.

Less poor and middle income households have also seen their purchasing power eroded.

The next 30 percent of households have lost Php3,418 to Php4,725 since the start of the year.

These are the households earning up to around Php21,119 monthly.

IBON estimates the erosion of purchasing power by deflating household incomes with reported monthly inflation rates.

The impact on the poorest households is also underestimated by the unavailability of inflation rates for low income groups.

The administration has been promoting measures such as importation of agriculture products and the public utility vehicle modernization as ways to mitigate high inflation.

But Africa said that these government measures are tepid because the economic managers only see the numbers as cold statistics and callously insist that the situation is manageable.

“The measures are weak, slow to take effect and oblivious to the worsening conditions of tens of millions of the poorest Filipinos,” said Africa.

Africa also said that lower inflation in the National Capital Region (NCR) may reflect how the government is just managing the political impact of inflation.

“Reported NCR inflation of only 6.3 percent could be because the administration diverted food supplies to NCR to lower food prices here but at the expense of the regions,” said Africa.

Food inflation in non-food producing NCR is conspicuously moderated. There was a just 0.6 percentage point increase in NCR versus 1.5 percentage point increase outside NCR, and 1.2 increase nationwide.

“The government should provide real relief to millions of poor Filipinos and middle class. This includes immediate price controls, stopping TRAIN’s consumption taxes, and a meaningful wage hike. Steps must also be taken to strengthen domestic agriculture and Filipino industry,” he said. #

 

Rate hike for Maynilad customers approved: Looming increase in water rates to burden consumers more

Amid soaring prices, the MWSS Board of Trustees has given the nod to higher water rates for Maynilad Water Systems Inc.

This and impending Manila Water Company, Inc. rate increases are bound to burden consumers anew, said water rights group Water for the People Network (WPN).

WPN urged the Metropolitan Waterworks and Sewerage System-Regulatory Office (MWSS-RO) to suspend the hike so as not to aggravate the difficulty of millions of low-income families in spending for their basic needs.

Approved by the MWSS Board is a Php5.73/cubic meter (cu. m.) hike for Maynilad as proposed by the MWSS-RO.

Meanwhile, the proposed increase for  Manila Water rates is Php6.26-Php6.55/cu. m.), which is set for deliberation within the month.

These figures are the supposed results of the rate rebasing process.

Every five years, government determines new water rates according to its review of the water companies’ petitioned rates vis a vis their past and projected expenses throughout the concession period.

Purportedly in consideration of consumers’ inflation woes, the MWSS-RO proposed for the increases to be collected in tranches, starting in October.

Maynilad’s approved rate hike schedule begins at a weighted average of Php0.90/ cu. m.

Manila Water’s rate hike begins at a weighted average of Php1.50.

WPN however said that regardless of the scheduled tranches, any addition to current expenses further constricts spending for poor households.

This includes millions of families whose incomes already fall way below the Php995 Family Living Wage (FLW) for a family of five. The daily minimum wage in the National Capital Region (NCR) totals Php512.

MWSS-RO computes that this October, the bills of households covered by Maynilad will increase by a net amount of Php6.53 for households consuming average 15 cu. m. per month and a net amount of Php13.68 for households consuming average 25 cu. m. per month.

For Manila Water customers consuming the same average volumes of water, rates increase by a net amount of Php9.68 and Php20.30, respectively.

Aside from the basic charge, however, WPN noted that the all-in tariff includes other fees such as the foreign currency differential adjustment (FCDA), environmental charge, and the value-added tax (VAT).

All-in tariffs are already at Php48.03/cu. m. for Maynilad and Php36.40/cu. m. for Manila Water as of July 2018.

The MWSS-RO claimed that Maynilad’s approved rate hike is much lower than the company’s Php11.00 petitioned increase, as is the RO’s recommended increase for Manila Water compared to the latter’s Php8.30 proposed hike.

This supposedly reflects the MWSS’ prohibition of the inclusion of the water firms’ corporate income tax and expenses unrelated to water services such as donations and recreation.

WPN however said that the agency’s refusal to publicly show the documents proving this–prior to the approval of the MWSS Board–underscores that the rate rebasing process lacks transparency and authentic public consultation.

During the 2013 rate rebasing process, public clamor versus the discovered inclusion of such items in water bills led to the MWSS-RO’s rejection of the water concessionaires’ petitioned rates.

Thus, per their concession agreement (CA) with the government, Maynilad and Manila Water subsequently appealed to international arbitration courts to demand compensation for lost revenues.

The courts have ruled twice in favor of Maynilad. Manila Water, which the international courts have turned down, has a pending case.

Consumers face more tariff increases in the future, WPN said, because of government’s privatization of water despite its being a public utility.

The group challenged the MWSS-RO to spare consumers of additional fees by stopping the hike.

WPN also stressed the urgency of scrapping the CA, reversing water privatization and instituting strong government regulation over all public utilities. #

295,000 jobs lost since Duterte assumed office, IBON maintains

Research group IBON stood by its estimates that close to 300,000 jobs were lost since the start of the Duterte administration after Employers’ Confederation of the Philippines (ECOP) honorary chair Sergio Ortiz-Luis said the group’s description of jobs lost is “deceiving”.

Ortiz-Luis reportedly said that it is deceiving to claim that the number of employed decreased by 300,000 just because there is data showing that employment dropped, even if there are new entrants to the labor market.

But Philippine Statistics Authority (PSA) data reports net employment generation, said IBON executive director Sonny Africa. “Net employment generation means employment created net of employment lost,” he explained.

“Ortiz-Luis’ argument about the number of entrants into the labor force is meanwhile puzzling because this is actually irrelevant in the PSA’s measurement of employed Filipinos,” Africa added.

“The number of employed reflects the number of jobs the economy generates, while the labor force measures those who have to compete with each other for whatever jobs the economy generates,” he explained.

PSA figures show that the number of employed fell from 40.954 million in July 2016 to 40.659 million July 2018.

IBON attributed the drop in the number of employed Filipinos to a huge 1.8 million reduction in agricultural employment over the same period.

Job losses and expensive food characterize the crisis in the agricultural sector, the group said.

IBON further said that job creation in the rest of the economy was not enough to compensate for the big agriculture job losses.

Gross job losses counted 2.2 million while gross job creation was only 1.9 million, hence the 295,000 drop in the number of employed.

The biggest job generation is in sectors that do not necessarily indicate a strong economy, IBON said, such as in the public sector and construction.

The group added that net job creation from July 2017 to July 2018 is feeble at 488,000 additional jobs compared to the 701,000 jobs created on average annually in the decade prior to the Duterte administration.

This failed to offset the 783,000 jobs lost in July 2017 from July 2016.

IBON said that Ortiz-Luis joins the administration’s economic managers in being dismissive of the jobs crisis becoming more severe under the Duterte administration.

“They have on the contrary hyped latest employment statistics as the highest among July rounds in the last 10 years, deflecting the issue of massive job losses,” the group said.

“It’s the economic managers that have been deceiving us, apparently Mr. Ortiz-Luis included,” Africa said. #

Jobs crisis getting worse under Duterte gov’t – IBON

Research group IBON said that the jobs crisis in the country is getting more severe under the Duterte administration.

The group said that the government should be more forthright and admit growing economic insecurity from inflation and joblessness rather than keep trying to downplay this.

Millions of Filipinos are jobless, including those excluded from official unemployment figures, or have jobs but endure poor quality work.

IBON said there are less jobs available now compared to the start of the Duterte administration.

The number of employed Filipinos has fallen by 295,000 from 40.95 million in July 2016 to just 40.67 million in July 2018.

This is largely due to a huge 1.8 million drop in agricultural employment over that period.

Job losses and expensive food characterize the crisis in the agricultural sector.

IBON pointed out that job creation in the rest of the economy was not enough to compensate for the huge job losses especially in agriculture.

There were gross job losses of 2.2 million between July 2016 and July 2018 but only 1.9 million in gross job creation, hence the 295,000 drop in the number of employed.

Moreover, the group said, the biggest job generation is in sectors that do not necessarily indicate a strong economy.

The largest part of additional employment since July 2016 was in the public sector where 500,000 jobs were created, followed by construction with 393,000 in likely mostly short-term work.

These were followed by 269,000 jobs in manufacturing which is potentially important but barely 14 percent of gross job creation in the last two years.

IBON stressed that net job creation in the economy is feeble. Only 488,000 additional jobs were generated in July 2018 from the year before.

This is less than the 701,000 jobs created on average annually in the decade 2006-2015 prior to the Duterte administration.

It was also not enough to make up for the huge 783,000 jobs lost in July 2017 from the last year, hence net job losses since the start of the administration.

This crisis is obscured in the official statistics because millions of discouraged workers are no longer counted as unemployed even if they are jobless and are just statistically dropped from the labor force, said the group.

Combined with the effect of K-12 implementation in senior high school (SHS) since 2016, the labor force participation rate has dropped to 60.1 percent in July 2018 which is the lowest in 36 years or since 1982.

There are also signs that the quality of work is drastically worsening, said IBON.

The number of under-employed, or those with jobs but seeking additional work, increased by 464,000 in July 2018 from the year before to reach 7 million.

The underemployment rate has correspondingly risen to 17.2 percent from 16.3 percent last year.

The current jobs crisis consists of the millions of jobless Filipinos including those who are no longer officially counted as unemployed and the millions of Filipinos who have jobs but suffer poor quality work that is not enough to live securely and decently.

As it is, IBON conservatively estimates at least 11.3 million unemployed (4.3 million) and underemployed (7.0 million) Filipinos as of July 2018 which is one in four (25 percent) of the labor force.

IBON said that amid skyrocketing prices and inflation, it is more urgent than ever to ensure sustainable and decent employment for millions of Filipinos.

The only long-term solution is for the government to invest in genuinely developing domestic agriculture and Filipino industries. #