1. What is the Development Policy Research Month (DPRM) about?
DPRM is an annual celebration mandated by Presidential Proclamation 247 signed on September 2, 2002. The observance of the DPRM is meant to elevate people’s awareness and appreciation of the value and importance of policy research in program planning and policymaking. Policies as well as programs and projects of the government would have more backbone and direction if they have a strong research base compared to the intuitive strategy of whimsical decisionmaking. Para hindi “suntok sa buwan” ang mga polisiya, proyekto at programa ng gobyerno.
2. What is the role of the Philippine Institute for Development Studies (PIDS) in the celebration of the DPRM?
PIDS is the lead government agency in the annual celebration of the DPRM owing to its important role as the Philippines’ leading state think tank. The DPRM Proclamation that designated PIDS as lead agency in the DPRM celebration was signed in 2002 during the Institute’s 25th founding anniversary.
3. Why is there a need to declare a DPRM? What is its significance?
Policy research is needed to craft effective plans and policies for the country’s development. The DPRM is meant to make our policymakers and the general public become more aware of the importance of research evidence in policymaking and to remind our policymakers that research outputs are within their reach for their decisionmaking processes.
ABOUT THE THEME
4. This year’s theme focuses on addressing the jobs challenge toward inclusive growth. Why is this theme a development concern?
The Philippines enjoys a rapid economic growth. From 2008 to 2013, it registered an average GDP growth rate of 5.1 percent. This can be attributed to improved macroeconomic fundamentals and better financial management. The country also achieved investment-grade status last year, which will lower its cost of borrowing and boost investor confidence. Despite these developments, income inequality and poverty incidence remain high and stable in the last two decades. It is widely believed that this failure to attain greater inclusiveness is due to widespread joblessness and underemployment because of the country’s inability to rapidly expand quality job opportunities. Discussion about these issues is strong from various sides of the socio-political spectrum of the country, as well as among international development organizations. This year’s DPRM examines the causes of unemployment and underemployment and explores the effects of labor market regulations and employment-generation programs to determine if they are really welfare and growth enhancing.
5. How does the Philippines compare with its neighboring countries in terms of unemployment rates?
The Philippines has consistently registered the highest unemployment rates among the Southeast Asian countries based on World Bank data for the period 1990 to 2012. In 2012, the country’s unemployment rate stood at 7 percent. Although Cambodia and Lao PDR registered low unemployment rates, this should be interpreted with caution. The majority of their employed population works in the informal sector and in vulnerable employment, which induces more poverty. This relationship is evident if one looks at the proportion of their population living below the poverty line. In 2010, Cambodia, Lao PDR, and the Philippines have more than 20 percent of their population living in extreme poverty.
6. Is the jobs issue different for each social class?
Yes. For the middle class and educated, the issue is more of underemployment. It is looking or waiting for a job that best fits their skills, ambitions, and temperament. For the poor, jobs are about survival. Unlike the middle class, they cannot afford to be unemployed for long periods. That is why the poor and those with low levels of education have relatively low rates of unemployment. What matters for them is how to earn more from time spent on work. Therefore, among the poor, the issue is not primarily about idleness. It can be more accurately described as a combination of joblessness (unemployment and underemployment) and lack of opportunities for productive and rewarding work.
7. What do we mean by “jobless growth”?
Jobless growth typically means economic growth without expanding employment opportunities. However, it signifies more than that. It means that the number of additional jobs associated with the growth of GDP or sector outputs are too little to make a substantial dent on the unemployment or underemployment rates over a quarter or a year.
8. How can we address jobless growth?
A study by PIDS titled “Labor Policy Analysis for Jobs Expansion and Development” authored by Dr. Vicente Pacqueo, Dr. Aniceto Orbeta, Dr. Leonardo Lanzona, Jr., and Mr. Dean Gerard Dulay, suggested a 12- point agenda to address the issues of jobless growth and curb the perennial problems of unemployment and underemployment. This program is called Jobs Expansion and Development Initiative or JEDI.
9. What does the PIDS study say about the impact of labor regulations?
The PIDS study looked into the effectiveness of minimum wage regulation. Results indicate that smaller firms suffer from minimum wage. It has a significant negative effect on employment in small enterprises. This has serious implications for the Philippines considering that the majority of businesses are micro, small and medium enterprises. The PIDS study also noted that a faster rise in minimum wage results in lower household income and a higher probability of falling into poverty.
10. What does the JEDI program prescribe to address the jobs challenge?
The JEDI program recommends to expand gainful jobs through the acceleration of labor-intensive production and to improve investments in education and health. Its 12-point agenda has the following components:
1. Simplifying labor dispute resolution processes to cut the time, cost, inconvenience, and uncertainty involved;
2. Making the rules on hiring and firing decisions more flexible, leaving the firms and workers to negotiate and work out agreements that are mutually beneficial;
3. Instituting measures that will minimize the imposition of labor regulations and practices detrimental to and discriminatory against the poor and other disadvantaged populations;
4. Allowing firms to hire low-skilled and poor workers who want to voluntarily opt out of the mandatory minimum wage norm, recognizing that it hurts rather than helps them
5. Experimenting with a Singaporean style policy providing limited grants to targeted ultrapoor workers whose market-determined wages fall far too short of a predetermined social norm on decent wages (should the government find conformity to this norm of public good)
6. Transforming the consultation process from a tripartite into a quadripartite system that would give the poor, unemployed, underemployed, and self-employed direct representation in the determination of labor regulations and policies;
7. Encouraging labor unions to focus on raising the competencies and productivity of workers as a means to achieving decent wages
8. Lengthening to two years from six months the compulsory regularization of young workers to expand their learning experience and build their skills on the job;
9. Ensuring quality implementation of the K-12 reform; undertaking institutional reform of the Technical Education and Skills Development Authority as articulated in the 2011 Economic Policy Monitor of PIDS; and pursuing ongoing Commission on Higher Education initiatives like the Unified Student Financial Assistance System for Higher and Technical Education (UNIFAST) aimed at improving access to quality higher education and the production of good research
10. Implementing the extension of demand-side education assistance of the 4Ps to high school students and complementing it with policies and programs that facilitate on the-job training and employment in private enterprises
11. Promoting research and development activities, including piloting and testing of innovative approaches; and
12. Facilitating the emergence of a well-organized coalition of stakeholders devoted to finding and promoting approaches that effectively advance the interest of poor workers now being excluded from gainful job opportunities.
(Note: The jobs related question and answers in this Q&A were based from the PIDS study “Labor Policy Analysis for Jobs Expansion and Development” authored by Dr. Vicente Pacqueo, Dr. Aniceto Orbeta, Dr. Leonardo Lanzona, Jr., and Mr. Dean Gerard Dulay)