Behind the 27.5% (Q-on-Q) Surge in Philippine Unemployment Rate

Today’s the mainstream headline reports a staggering 27.5% quarter on quarter surge in unemployment

From the Inquirer

The number of unemployed Filipinos in the last quarter of 2013 swelled to more than 12 million, making the 7.2-percent growth in the country’s gross domestic product (GDP) last year, considered the second-fastest after China, far from inclusive.

The unemployment rate rose to 27.5 percent, or an estimated 12.1 million individuals, as 2.5 million Filipinos joined the ranks of the jobless between September and December, a Social Weather Stations (SWS) survey found.

The level of joblessness across the country was almost 6 points higher than the 21.7 percent (some 9.6 million) in the previous quarter, results of the SWS survey conducted from Dec. 11 to 16 showed. The results were first published in BusinessWorld…

The article, as always, has used Typhoon Yolanda and the Moro problem as the convenient bogeymen. Ironically both factors represents a regional concern rather than a national issue. The unemployment issue is a national issue.

Two weeks back I wrote

Yet if there has been any truth to these surveys then this means that whatever the statistical growth hasn’t been shared by most of the population (in numbers, in geographic areas, in the distribution of socio economic groups).

Even when we account for ‘improvement’ criteria, for both March and December, the proportionality of growth 23% and 9% seem to reflect on the distribution of the formal sector. However, the 9% improvement in December means that even many in the formal sector feels polarized from the current boom.

Worse, the above are signs that the informal economy have been in sick bed for quite sometime.

So the unemployment survey appears to validate my earlier observations.

 

And it has been a curiosity that the economic industry still upholds a code of silence. There hardly has been anyone willing to point out how the BSP’s inflationism, as evidenced by a spike in M3…

…and which has been ventilated in the falling Peso, has been a major factor in driving high unemployment levels. 

The privileged few (less than 2 of 10 households) with access to the banking system and to banking credit has been corralling resources as evidenced by the massive explosion of bank lending growth to select sectors, further by soaring bank deposits, weak peso, spiraling of M3, soaring property and stock markets, debt financed overexpansion of the supply side and real (not statistical) price inflation. 

These had been used to generate a mirage called ‘strong’ economic growth when in reality such statistical economic growth benefited mostly cronies and private sector political allies which trickled down to some in the industry. 

The 'strong' economic growth story combined with anti-corruption histrionics has been used as a Public Relations prop to attain popularity ratings in order to secure access to cheap money in the global and local credit markets in order to finance political boondoggles. This has resulted to what I call as the convergence trade, a symptom of the grotesqueness in the mispricing of the domestic bond markets and interest rate levels that has underpinned the concentrated credit bubble hidden in the eyes of the general public.

All these reveals how inflationism represents a redistribution of resources from society to the government and to government private sector cronies.

And the emperor has no clothes is being gradually exposed by economic reality. 

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