Has the Emancipation Act been the Cause of the Philippine Employment Spike Last August?
Philippine employment surged last August. Was this because of the Emancipation Act?
CNN Philippines, October 6: Employers in the country hired more Filipinos in August, data from the Philippine Statistics Authority (PSA) showed Friday. In a briefing, National Statistician Dennis Mapa reported that the number of jobless Filipinos hit 2.21 million, a decrease from July's 2.27 million. The latest figure also translates to a national unemployment rate of 4.4%. The number of people in the labor force market jumped to 50.29 million in August, up from July's 46.90 million. Employed people also climbed to 48 million in August, higher than the 44.63 million in July, while the underemployed—or those with jobs but are still looking for additional income—fell from 7.10 million to 5.63 million.
The government comes out with incredible numbers.
While the August labor or employment data exhibits substantial improvements, it comes on the backdrop of a plunge last July.
The employed data showed the biggest monthly losses and gains in July and August since the PSA started publishing the labor survey by month in 2021.
From their numbers, the employment data is as volatile as the stock market.
Such volatility suggests that employers suddenly went on a firing spree or employees went into a mass resignation last July.
Then, investments suddenly gushed in to prompt a mass hiring in August.
But the more interesting data comes with the sectoral breakdown.
Employment rose most in the agricultural, fishing & aquaculture, construction, and administrative sectors.
With all the chatters of El Nino and how it could affect the Agri industry, farmers railing against imports, and low buying prices by the NFA, what event/s in June or July have spurred mass hiring?
A possible key answer is the Php 58 billion farmer debt jubilee via the Emancipation Act, which was signed into law last July.
Debt relief has spurred an avalanche of investments? Really?
Do farmers have so much cash in hand? If so, why the debt relief at all?
Farmers and the fishing industry have hardly been borrowing from the banks too. Banks have shunned lending to SMEs.
Thailand's experience should provide a roadmap to the industry.
While Thai officials recently extended a 3-year grace period or a partial debt relief to their farmers, past interventions have led to the current plight of their farmers.
Reuters, September 19: The foundation for Thailand's rice sector was laid in the late 19th century during the reign of King Chulalongkorn, who promoted free trade and agricultural and land reforms, said Nipon Poapongsakorn, an agricultural expert at the Thailand Development Research Institute. Decades of investment in research and infrastructure allowed farmers to switch to high-yielding varieties beginning in the 1960s, cementing Thailand's then-position as the world's largest rice exporter, said KNIT's Somporn. "When you grow high yielding variety, you have to grow it in irrigated areas," he said. Thai governments largely steered clear of market interventions until former prime minister Yingluck Shinawatra in 2011 rolled out a scheme that paid rice farmers above-market rates for their crop, both experts said. That move kicked off a decade of handouts that stymied productivity in Thailand's rice sector, leaving average yields per rai (0.4 acres) lower than those of Bangladesh and Nepal, said Nipon.
So, do bailouts produce a boom or a bust?
Was there also a construction investments boom (real estate and public work) in the prior months to have spurred a hiring spree too?
Definitely not in the context of bank lending, where loan growth has been modest.
In the PSE, a lot of company delistings came from the infrastructure and construction industries (HLCM, EAGLE & MPI), which is hardly a sign of a boom.
So where did both job gainers acquire investments? Perhaps from foreigners?
On the other hand, employment dropped most in Trade, the Public sector, finance and insurance, information and communication, and mining.
Fundamentally, the August Philippine job growth emerged from the political sectors, while the drop in employment possibly reflected a developing slowdown in the major industries (Trade, Finance, Infocom) of the GDP.
Torture data long enough, as the late economist Ronald Coase noted, and it will confess to anything.
