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Wednesday, November 02, 2005
Jobs in local factories declining since 1990s
Local factories have very little share in the total number of jobs held by Filipinos compared to factories in Indonesia, Malaysia, Thailand and Vietnam, according to a study conducted by former National Economic and Development Authority (Neda) deputy director general Ponciano Intal Jr.
The study revealed that the sector’s share in total employment has been going down since the past decade. It also has the poorest performance in creating new jobs in the Southeast Asian region.
Intal looked into why Philippine factories have lagged behind their counterparts in Southeast Asia.
The study found that from 1976 to 1980, the productivity of local factories went down by 1.9 percent a year while that of the whole economy had below zero productivity in the past two decades.
The common survival strategy adopted by the “losing” sector seems to have been the whittling down of the real income of their workers which, Intal says, is not sustainable.
Real income
He found that real income dived by half from 1988 to 2002.
He said the sector can still catch up if: more investments are made by government in support infrastructure like ports, roads and railways; if manufacturers plow back their profits in modernizing their plants; and if the government invests more in quality education.
He suggested that the government must increase tax efforts, seek debt relief and enlist private capital in public building projects.
He advised manufacturing companies to get out of labor-intensive industries because the country has expensive unskilled labor.
They must shift to skills-intensive businesses that are not technology intensive.
Intal said firms should also invest in people because the country’s comparative advantage is a large pool of highly skilled workers.
He also recommended that the manufacturing sector become part of regional and global production networks or shift to low volume, specialized or higher-value product niches.
He stressed that companies should invest in their workers, not underpay them. (Philexport News and Features)
(November 2, 2005 issue)
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