Connect with us

Hi, what are you looking for?

Editor's Pick

PHL sees no jobs boost from free trade deals

The unemployment rate surged to a 15-year high of 17.7% in April, as many businesses shut down during the lockdown. — PHILIPPINE STAR/EDD GUMBAN

THE country’s free trade agreements (FTAs) have increased labor productivity but not jobs, a study from the Philippine Institute for Development Studies (PIDS) showed.

“Impact of FTA on Philippine Industries,” authored by Francis Mark A. Quimba, Mark Anthony A. Barral, Maureen Ane D. Rosellon, and Sylwyn C. Calizo, Jr., looked at Philippine trade agreements with Japan and regional agreements among the 10-member Association of Southeast Asian Nations (ASEAN) and partner countries like Australia, New Zealand, and South Korea. These agreements have allowed the Philippines to import products at zero duties.

The influx of imports under trade agreements allow for increased industry output as businesses heighten labor productivity, according to the report. However, these businesses are not hiring additional workers.

“Businesses are hesitant to increase employment despite benefiting from importation at lower rates,” the researchers said.

Government trade policies should be supported by employment policies to address the absence of new jobs, they said.

“Businesses are hesitant to increase employment because these tend to become long-term investments which would include in-house training and skills development,” the think tank said.

“Thus, the government needs to increase the confidence of industries and companies in the growth prospects of the country for them to translate their gains from tariff-free imports to employment.”

The government needs to add to labor supply, it added, by offering incentives for universities to work with industry in developing specialized skills among the workforce.

While FTA-based imports increase industry growth, the study noted that the effects on real gross value-added growth, or its contribution to the economy, are “not statistically significant.”

The Philippines recently joined the 15-country mega trade deal Regional Comprehensive Economic Partnership (RCEP), which the Trade department aims to ratify by next year.

Since the signing, the Trade department has been looking at participating in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which was signed by 11 countries in 2018.

The department is also targeting to finish FTA negotiations with South Korea this quarter, after talks stalled on items like bananas, for which Philippine producers are seeking lower tariffs, and South Korean auto exports, for which Seoul is seeking greater access.

The lockdown designed to address the health crisis led to a decline in jobs last year as the unemployment rate surged to a 15-year high of 17.7% in April, according to data from the Philippine Statistics Authority. The rate in October eased to 8.7%, translating to 3.813 million jobless Filipinos.

The PIDS report also said Philippine industry links are weak and the government should match smaller domestic firms with multinational affiliates. — Jenina P. Ibañez

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Top News

Nikola, an electric truck startup, saw its stock price fly high as it went public and announced a deal with General Motors. A damning...

Top News

SEC probing Nikola Motors over short-seller claims of fraud – Business Insider Business Insider logoThe words “Business Insider”. 2020-09-14T23:20:04Z Massimo Pinca/Reuters The Securities and...

Top News

Trump paid over $70,000 on hair when he was on ‘The Apprentice’: NYT – Business Insider Business Insider logoThe words “Business Insider”. 2020-09-27T23:34:00Z Fred...

Stock

Stock Markets8 minutes ago (Jul 31, 2020 07:50PM ET) (C) Reuters. FILE PHOTO: James Murdoch, the son of media mogul Rupert Murdoch, and his...

Disclaimer: SecretsOfRichDads.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice.
The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 Secrets Of Richdads. All Rights Reserved.