Thony Rose Lesaca
Manila Standard
15 July 2025
Rapid gross domestic product (GDP) growth has doubled the Philippine economy since 2010 and created over 11 million jobs, according to a World Bank report released Tuesday.
“Since 2010, the Philippines has forged ahead, achieving record low unemployment and doubling its GDP. Rapid growth put the country in the top quartile of fastest growing middle-income countries [MICs], while the 11.7 million jobs created led to a record low 3.8 percent unemployment rate in 2024,” the World Bank said in its Growth and Jobs report.
Data showed that employment grew 0.4 percentage points annually faster than the working-age population, with a shift towards wage-earning jobs in more productive sectors. Economic growth was propelled by a “spatial catch-up,” leading to relatively rapid income growth for the poor.
“At the historical growth rate from 1990 to 2010, the economy would have taken 19 years to double. Instead, GDP growth since 2010 has been consistent with the economy doubling every 13.5 years,” the report noted.
“Faster GDP growth came with employment outpacing working-age population [WAP] growth by 0.4 percentage points per year,” it said.
The report also said that the newly created jobs were of higher quality, with an increase in waged positions rather than self-employment, and a move towards more productive sectors.
Growth was fueled by pro-investment reforms, macroeconomic stability, and a surge in public and private investment.
Foundational infrastructure spending, structural reforms, and private capital mobilization were key drivers.
Capital accumulation accounted for over 90 percent of growth, reflecting high investment returns. Lagging regions contributed significantly, with most new jobs in non-tradable sectors, though IT and IT-enabled services also boomed.
Post-pandemic, economic growth has been among the highest in Asia and globally among emerging economies.
Poverty incidence declined to 15.5 percent in 2023 from 18.1 percent in 2021 and below the pre-pandemic level of 16.7 percent in 2018.
The labor market also improved, with the unemployment rate falling to 4.3 percent in 2024, surpassing the government’s target of 4.4 percent to 4.7 percent.
“Nevertheless, significant structural challenges persist,” the report cautioned. “Capital deepening and labor force expansion have primarily driven economic growth, while gains in total factor productivity remain limited.”
Regions outside the National Capital Region (NCR) experienced faster labor productivity growth over the past 15 years. Low-income regions (LIRs) and medium-income regions (MIRs) saw 3.2 percent and 2.5 percent annual productivity growth, respectively during the post-global financial crisis (GFC) period, a significant improvement from 2.3 percent and 2.1 percent between 2001 and 2009.
The National Capital Region experienced a decline in annual growth in value added per worker, from 3.1% to 1.5%.
The accelerated labor productivity growth in LIRs and MIRs was attributed to an increased number of formal firms, with LIRs achieving 3.8 percent growth and MIRs 2.7 percent growth post-GFC.
Many of these firms capitalized on non-tradable activities like construction, real estate, commerce, and hospitality services, driven by local demand. The rise in formal firms also led to improved wage employment, increasing from 60 percent to 67 percent in LIRs and 77 percent to 84 percent in MIRs.
“Growth was also more spatially balanced than it had been [with low- and medium-income regions contributing significantly to overall GDP growth], and the real incomes of the bottom 40 percent grew at a faster rate than the incomes of the wealthiest 20 percent,” the World Bank said.
“Underpinning this progress were improved labor outcomes, including a shift from self-employment (primarily in agriculture) to wage employment (mainly in services), driven by higher public investment (mainly in connectivity infrastructure) and reforms that helped increase private investment,” it said.
No comments:
Post a Comment