THE COUNTRY’S massive infrastructure program has started paying dividends to the economy this early.
The construction boom that is very evident in Metro Manila and the provinces is generating thousands of jobs and raising the wages of workers in the sector.
I have seen from firsthand experience the increased demand for construction workers as a result of the numerous government and private sector projects. Property companies, for one, now find it difficult to hire construction workers because of the strong demand. Government-initiated projects and private sector companies are competing for workers.
Construction workers, thus, are now paid higher than minimum wage earners because of the scarcity of manpower supply. A construction or property company must now pay a premium in the daily salary if it wants to hire a worker. You will not be able to hire a construction worker if you do not pay him a premium over the minimum wage.
President Rodrigo Duterte’s Build, Build, Build infrastructure program has started to shift to higher gear and “unfortunately” joined the private construction boom. Property companies are now starting to build housing and office space projects whose reservation sales were made two years or a year ago. All these add up to the construction boom, along with the roads, bridges, airports and seaports lined up by the government.
I believe these massive construction activities have stabilized the country’s unemployment situation. Government figures seem to back this up. The unemployment rate, according to the latest figures of the Philippine Statistics Authority (PSA), eased to 5.5 percent in April from 5.7 percent in the same month a year ago, as more people found jobs during the period.
The government statistics agency said the April figure was the lowest jobless rate for all the April rounds of the Labor Force Survey in the past decade.
The National Economic and Development Authority conceded that the infrastructure build-up in both the public and private sectors helped boost the number of employed Filipinos in April.
The PSA’s Labor Force Survey showed that the employment rate increased to 94.5 percent ― or equivalent to 40.9 million Filipinos ― from 94.3 percent in April 2017 (40.2 million Filipinos). Net employment generation, meanwhile, reached 625,000, reversing the loss recorded in April 2017.
Economic Planning Undersecretary Jose Miguel dela Rosa earlier said employment rose “partly due to increased infrastructure spending as the Department of Public Works and Highways’ road projects and rehabilitation of public school facilities are already underway nationwide.”
The sector registered a strong employment growth rate of 8.1 percent or 605,000 workers, raising its total employment share to 19.7 percent, the largest in the past decade. The construction sub-sector is the biggest contributor to employment, generating 468,000 jobs during the period.
The Philippines, said dela Rosa, is “now seeing the contribution of the ‘Build, Build, Build’ campaign in terms of job generation,” adding “we can expect the demand for workers in the sector to grow further as more projects break ground.”
The contribution of the construction sector is also evident in the gross domestic product figures for the first quarter of 2018. The economy expanded in the first three months of the year, partly because of increased government spending on infrastructure.
Finance Secretary Carlos Dominguez III said an even more aggressive spending under the ‘Build, Build, Build’ program and other poverty-reduction initiatives would enable the Duterte administration to hit its target of a GDP expansion of 7 percent or better and reduce poverty incidence to 14 percent over the medium term.
The government’s unprecedented investments in physical and human infrastructure, according to him, would supercharge the economy, attract more investments, create a lot more jobs, especially for the workforce, and liberate millions of Filipinos from poverty.
The current construction boom, especially the 75 big-ticket infrastructure projects of the government costing around $170 billion, will hopefully reverse regional underdevelopment and income inequality, and generate more jobs through the creation of growth corridors across the Philippines.
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This piece first came out in Business Mirror on July 29 2018 under the column “The Entrepreneur.” For comments/feedback e-mail to: mbv.secretariat@gmail.com or visitwww.mannyvillar.com.ph./PN
