Agri manufacturing sectors ‘necessary’ to create better jobs

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Tuesday, March 4, 2014

THE country should develop and invigorate the agricultural and manufacturing sectors to generate jobs, based on the World Bank study dubbed as "Philippine Development Report (PDR): Creating More and Better Jobs."

The study cited both sectors as crucial in creating more and better jobs in a bid to achieve inclusive growth.

The study started in 2011, centering on jobs as its contribution to the inclusive growth agenda of President Benigno Aquino III.


The team consulted over 200 individuals from the government, business, labor, informal sector, civil society, academe, and development partners.

"In the report, we realized that the two sectors would really create jobs and lift people out of poverty," Dr. Karl Kendrick T. Chua, World Bank Philippines senior country economist and main author of the PDR, said on Tuesday during the regional dialogue on Creating More and Better Jobs at the University of Southeastern Philippines.

At present, the services sector has been the largest employer since 1997 but, according to the report, "more than three quarters of the services sector is composed of low-pay or low-skill jobs, such as petty retail trade and public transportation, and as such, there has been no corresponding significant increase in productivity in the services sector."

"The benefit of this industry is very limited and by expanding the manufacturing and agricultural sector, they can bring a lot of job opportunities," Chua said.

According to the executive summary of the PDR: Creating More and Better Jobs, it is a crucial step to develop the rural sector by way of improving the agricultural sector of the country.

"Three quarters of the poor are found in rural areas, and agriculture employs most of the poor. This means that agriculture can play a key role in efficiently reducing poverty. In turn, productivity improvements in agriculture can help the country expand its manufacturing sector through lower minimum wages and input costs," the report said.

The study cited key recommendations to develop the agricultural sector, to wit: securing long-term individual property rights which can improve investment and productivity; increasing investment in agricultural public goods and support services instead of subsidizing farm inputs to enhance farm productivity and household income; pursue liberalization initiatives in the area of marketing and logistics to further reduce food and input prices, and encourage more economic activity and job creation; and use clusters and value-chain development approach in delivering public goods and support services to connect smallholders and agribusiness.

"Through strong local multiplier effects of family farms, the growth of this sector can then serve as an impetus for the growth of and job creation in the non-farm sector," the report said.

According to the study, the Philippines gave the head start in the manufacturing industry, but failed to industrialize fully. The manufacturing sector in the country stagnated or declined brought about by protectionist policies, uncompetitive practices, and a small consumer base but since it is capable to hire workers who are not degree holders or did not finish their education, it is recommended that the manufacturing sector be reinvigorated.

"The manufacturing industry requires little education so it can cater directly to the poor," Chua said.

This can be done by increasing competition in the economy and investing more in infrastructure.

"Having more contestable markets can spur investment from both domestic and foreign sources, bring down the cost of manufacturing inputs and logistics, provide workers in agriculture and informal services with better jobs in manufacturing, and increase real household income through lower consumer price study," the study stated.

Published in the Sun.Star Davao newspaper on March 05, 2014.


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