Wages and employment in the Philippines

Å* AGS m EMPLy=EN T TE=1 M-II PDTS by- Deepak Lal Ser:Le. Studies in Emloymen and Rural Developmen No 57 Dvsion : Employment an. Rural Develoment Departnent Development Economics Development PolTcy Staff Internatina Bank for Reconstructfio and. Develomepnt Ths oaper was- preared i connecti.on with the Emloyment and Rural De.Lopment- DLvision's support of tha Phiippines "Easic Needs anti Poverty` mission of the Bankrs East Asia anda Pacific Regional Deparrment. It also represents a contribut:Lon to the Div-sion's, on-going research on wage and emloyment trends and stuctures in developing countr:ies. it is being circulatad in- this preliminary for= for wider discuss!on, as it ra!ses is.:ues and suggests modes of analysis whtch maybe relavant for a wider group of countzies than. the specifi-c app1lcatlion to the 2hilippines, The views expressed are those of the author and not necessarily those of thaE Tis report may not be published nor may it. e quoted as represent±ng the views of the Bank and its- affiliated organizations, Washiugton, D,C4, October 1979 "This is not the fault of economists. It is a consequence of the nature of the facts which we study. Our facts are not permanent, or repeatable, like the facts of the natural sciences; they change- incessantly and change without repetition. Further, when considered as individual events, they are often events of great interest. Every business has a history of its own, every consumer has a history of his own; any of these histories may have its own drama when we come close to it. But as a general rule, we are not seeking, as economists, to come close. We are trying to detect general patterns among the mass of absorbing detail; shapes that repeat among the details which do not repeat. We can only do this if we select, something less than the detail that is presented to us. In order to. analyze, we must simplify and cut down." John Eicks, 'Oxford Economic Papers, November 1975, p. 320. "In my judgement current appreciation of the real value of economic science has been too much influenced by excessive focus on its--power to predict to the neglect of its wider power to e=lain. This emphasis runs two dangers. From the point of view of the lay philistine, the record is not good - the claims have-been much too extensive and have often been just wrong. From the professional point of view, all generalizations that have not predictive power tend to be regarded as worthless,.... While we-may not be able to predict what form the future may take, we may attempt description in general terms of how economic systems work or may work and put our conjectures as well as we may to the test of present observation and past record. And such knowledge, as well as providing useful perspectives, may itself sometimes throw light on the solution of wider problems of social and political choice." Lionel Robbins, Journal of Economic Literature, September 1979, pgs. 1003-4, PREFACE This study of Wages and Employment in the Philippines is the result of the Employment and. Rural Development Division (DEDER)'s operational support for the East Asia and Pacific Region's Basic Needs and Poverty Mission to the Philippines in July-August 1979. It represents the DEDER's country collaboration with the regions in their economic work. It is also a part of the on-going research in the DEDER on 'Employment, Wage and Trends Structures in Developing Countries," for which a number of other country studies are being financed through RPO 671-84. Besides providing a systematic compilation and assessment of data. relating to employment, unemployment and wages in the Philippines, between 1956-78, the study focuses on what is found to be a surprising stylized fact about the Philippines economy, viz.,- that despite relatively rapid rises in the overall demand for. labor relative to supply there have been two periods 1959-64, and more recently 1969-74, when real wages have declined. These real wage declines, in particular that during the early 70's are also associated with the rising numbers of the poor in the Philippines in the late 60s and early 70s. An understanding of the process which might have generated these real wage declines is the major analytical task attempted in the study, as it is central in devising labor market related policies for poverty redressal. In this context the study has a number of novel features which may be worth noting. First, it shows that for a small open economy whose exports are land or natural resource intensive, macro-economic and exchange rate policies will have important effects on real wages and thence on poverty redressal and income distribution. This is an aspect, which has not been taken into account in past studies of LDC labor markets even though. it represents an application of the well known Stolper-Sauelson theorem of internationaL trade theory. The resulting analytical and policy framework (outlined in Chapter 3 below) may be of releVance to a number of other LDC's which. too have an e=port structure dominated by land/natural resource intensive exports. A major conclusion of the study is that for such economies, the e=change rate regime may have.yery different effects on real wages and povertTredressal as compared with the conventional views derived.for the more "tpical' case of land or natural resource scarce LDC's,whose exports are- labor intensive, Secondly, the study attempts to assess the functioning of Philippines labor- markets C;n Chapter 2), by delineating a simple analytical framework for,judging whether the labor markets are in some sense 'segmented', or are fairly well integrated, with..relatively rapid adjustments to changes in sectoral, occupational or regional imbalances.in.demand ",or supply, This is. shown to -be of importance for policy purposes, as the relevance and effectiveness of general labor demand raising policies (sometimes misleadingly referred to as "trickle down") as opposed to policies targetted at more specific socio- econom#cgroups to raise their real incomes, will depend upon the e=tent to which labor demand (and ceteris paribus real income) raising impulses in one part of the economy, are transmitted to the other parts. In this context, it is stressed that the important signs to be looked for are Ci) the degree of occupational mobility, Cii) the presence of man-made barriers to entry in particular occupations through eithervarious forms of social stratification and/or combinations of labor and Cii±) the movements in various wage differentials over time, Finally, the study shows the usefulness in devising poverty redres'sal programs of distinguishing between what may be termed the long-term 'employment' problem from various short-run problems concerned with various distortions and disequilibria in the short to medium term. The former problem is shown to be part of the general problem of devising the second best optimal growth path of employment, output and consumption for the economy. This provides the link between the analysis of labor markets and the employment "problem", and the derivation of an intertemporally consistent set of shadow prices for the design and evaluation of investment and public transfer (including poverty redressal) prograrmes. The importance of the critical consumption. level which is derived within this framework, as the intertemporally consistent poverty line, given the govermment's objectives and constraints, and which is the operationally relevant poverty line for designing poverty redressing public programes (rather than some arbitrary paverty line based on nutritional or other considerations) is also emphasized, as well as quantified. The study is based.entirely on published sources of information. Our task, however, would have been impossible were it not for the numerous excellent studie4 of various aspects of the Philippines economy; which we were able to build upon. In addition,discussions with numerous academics and officials in the Philippines proved most useful. Needless to say, the author alone is responsible for any errors as well as the views expressed, which must not in any way be ascribed to the World Bank. (i) Table of Contents Page Introduction and Summary , . . . . . .. 1 Chapter I EMLOYMENT, UNEMPLOYNT AND WAGES - A STATISTICAL OVERVIEW OF TRENDS AND STRUCTURE , 6 1. Overall Trends in Labor Force, Employment and Unemployment ¶ ¶ ¶ ¶ 6 (a) Labor Supply and Employment . . , 8 (b) Unemployment . . . . . .. . , , , . 8 (c) Labor Force Participation Rates . , . 11 2. The Chanting Structure of EmDloyment and Out2ut13 . .. . . . . . . . . 1 (a) Sectoral Composition . . . . . . . . . 13 (b) Regional Structure . . . . . . . 13 (c) Employment Structure , . , , , , by Sex and Ru-al.-Urban Residence . 18 3. Sectoral Labor Absorption . . . . . . . . 22 (a) Employment and Output Growth . 2 (b) Changing Labor Intensities . . . . 24 (c) Sectjral Contribution to Labor Absorption .4 .. ,tt . . 9 , 29 4. The Quality of,Em.4loyment . . . . . . . . 40 (a) Changing Distribution of Employment by Worker Tvoe- . (b) Changes in Average Hours Worked4 . 6 (c) Changes in Numbers of Employed Wantimg Additional Work . , , s , 46 5. Wage Trends ,, , ,, . . . . . . . 49 6. Trends in Real Per Capita Consumption . 56 (ii) Page Chapter II THE FUNCTIONING OF TEE PHILIPPINES LABOR MAMKTS 65 1. Some General Analytical Considerations , , , 65 2. Are PhilioDines Labor Markets Segmented? 68 (a) Intergenerational Occupational Mobility 69 (b) Intragenerational Occupational Mobility 7.3 (c) Geographical Mobilit7 . . . . . . . . . 77 (d) Institutional Barriers . . . . . . . . . 80 3. Changes in Wage Diffrentials . . . . . . . . 80 CHAPTER III A FRAMEWORK FOR ANALYZING PHILIPPINES EMPLOYMENT ANDWAGETRENDS ................ 90 1. Introduction . . . . . . . . . . . . . . . . 90 2. Real Wages and Biased Growth?oth. 93 3. Real Wages in a 3 Factor-3 Commodity Open Economy Model 4. Real Wage and Real Comodity Price Movements 96 in the Philippines 1956-68 . . . . . . . 103 5, Causes of Relative Comodity Price Changes. 110 6. Macro-Economic Policy, Exchange Rates and Real Wages l...14 ... .11 Technical ADendices to Chapter III . . . . . . 123 I. Real Wages and Biased Growth? . . . . . . . 123 II. Real Wages and Relative Commodity Price Changes in an Open Economy . . . . . . 124 (iii) Page Chapter IV POLICY ISSUES . . . . . . . . . . * * * * * * 128 1. Long-Term Employment and Wage Issues * * . 128 (a) An Intertemporally Consistent Poverty Li4Te . . . . . . . . . . . . . . . . 129 2. Short-Term Disequilibrium and Employment and Wages Policies . . . . 133 (a) Minimum Wage Legislation . . . . . . . 134 (b) Special Employment Programs. . . . . . 135 (c) Rural Infra-structure and the Choice of Techniques . . . 135 (d) Promoting Small-Scale Industry and Employment. . . . . . . 136 (e) Reform of the Trade Control System 140- (f) Macro Economic and Exchange Rate Policy 141 Technical Appendix to Chapter IV . . . . . . 146 The Employment Problem . . . . . . . . . 148 Bibliography Statistical Appendix List of Tables Page 1. Labour Force, Employment and Unemployment, 1956-1978. 7 2. Labor Force Participation Rates by Sex, Age Group, 9 Philippines, Urban and Rural, 1956-1976. 3. Persons Not Wanting Work by Reason For Not Wanting Work, 10 by Sex. 1959-1976. 4. Sectoral Distribution of Employment and Output. 1956-1977. 12 5. Percent of Labor Force Employed in Agriculture, Non- 14 Agriculture and Unemployed by Region. 1967-1974. 6. Distribution of Employment by Major Industry Group, Sex, 17 Rural and Urban, 1965 and 1976. 7. Trend Rates of Growth of Employment and Output by Industry. 20 1956-1977. 8. Employment Generation by Sector. 1956-1977.: 21 9. Sectoral Employment-Output Elasticities 1956-1977. 23 10. Sector-tl Labor-Output Ratios. 5 11. Percentage Share of Labor Cost in Total Cost of Production in 27 Large Establishments in the Philippines - 1961 & 1967. 12. Breakdown of Employment in Some Industries for Some Years: 28 1966-1973. 13. Changes in Employment Structure in Manufacturing, 1956-1976. 30 14. Top Ten Major Manufacturing Industry Groups in Employment 31 Generation 1956-71 and 1970-75. Page 15. Changes in Employment Structure by Size of Firm, 1957-74. 32 16. Manufacturing: Capital Intensity, Investment and Growth in- 3-3 Output, Value Added and Employment, 1960-74. 17. Manufacturing Sector Indices. 35* 18. Employed Persons by Classes of Worker for Some Selected Years.38 19. Employed Persons by Major Industry Group by Class of Worker, 39 1957, 1968, 1973. 20. Per Cent Distribution of Employed Persons by Class of Worker, 41 Sex, Urban and Rural 1956- 1976. 21. Average Hours Worked by Employed Persons at Work, 1959-73. 43 22. Employed Persons at Work by Percent Working 40 hours or more 44 by Industry and Occupation Group, 1965-1976. 23. Employed Persons at pork in Agriculture and Non-Agricultural 45 Industries by desire for additional work by number of hours worked during the survey week and sex, Oct. 1965 and Aug. 1975. 24. Agriculture Real Daily Wage Rate 1950-1978. 47 25. Agriculture Real Wages by Region 1957-74. 48 26. Real Wage RAte Index of Skilled and Unskilled Laborers in Manila and Suburbs, 1956-1978. 50 27. Average Real Weekly Earnings of Wage and Salary Earners by 52 Major Industry Groups 1969-1976. 28. Average Real Weekly Earningsby Occupation-and 55 Industry 1913, 1976, (vi) Page 29. Real Per Capita Consumption and Real Wage Changes 1957-1975. 58 30. Evidence on Income Trends by Groups, 1965 to 1971. 60 31. Factor Shares, 1971-78. 62 32. Evidence on the Wage Sharei in Manufacturing. 1965-1974. 63 33. Mobility from Father's Occupation to Son in 1973 (Inflow Percentages). 70 34. Mobility from Father's Occupation to Son in 1973 (Outflow Percentages). 71 35. Provinces by Density, net inter-provincial migration, percent change in number of farms and farm size, and index of total 78 development. 36. Industrial, Occupational, Skill Regional and Sex Daily Wage 81 Ratios, May 1969. 37. Weekly Cash Earnings by Occupation, May 1957 and May 1969. 82 38. Ratios of Weekly Cash Earnings of Different Occupations 83 Relative to that of Agricultural Occupation, May 1957 and May 1969. 39. Weekly Cash Earnings by Industry May 1957 and May 1969. 85 40. Ratios of Weekly Cash Earnings in Different Industries Relative to that in Agriculture, May 1957 and May 1969. 86 41. Ratio of Average Weekly Real EArnings of Wage and Salary Earners, by Industry and Occupation, relativc to those in agriculture, 1969-1976. . 88 (vii) 'Page 42. Composite.Relative Price and Real Wage Tndices, 1956-78. 104 43. Some Monetary and Balance of Payments Indicators. 120. (viii) List of Charts and Figs. Page Chart I Labor Force, Employment Output and Unemployment 5 1956-78. Chart II Real Wages 51 Chart III Real Weekly Earnings by Industry, 1969-1976. 53 Chart IV Real Per Capita Income and Consumption, 1954-77, 57 Fig. I 91 Fig. II 9 Chart V Indices of Wholesale Domestic Prices and Exchange Rate 1956-78. 101 Chart VI Indices of Real Wages (C. Bank Series) 102 Chart VII Composite Indices of Real Wages and Relative Prices (1956-78). 106 Chart VIII (a) - Price Indice- for Importables 108 Chart VIII (b) - Price Indices for Exportables 109 Fig. III 113 Chart I7 Money Wages 1956-1978 117 NTRODUCTION AND SUA.RY The so called employment' problem in the Philippines has been the concern directly or- indirectly of a nmiber of recent studies, most notably of the IO's Comprehensive Strateg7 Mission (L974). CAlso see Eicks-Mc-Nicall (1971), Power- and Sicat (1971) Baldwin. (1925M), Castillo CL978)>, Manghas at, al (1976)). Most of these analyses have come to the conclusion that the Philippines "employment" problem must not be looked at in narrow labor market-q termR, but should be viewed as part and parcel of the type of development strategy the countr7 has followed In the last two decades. In particular the ILO mission's diagnosis of the problem was that,it was the result of a neglect of agriculture, and the promotion of biased import-Subst4tuting industrialization, which hindered the development of labor Jttensive manufactured exports. If the latter biases had not operated, not only would labor absorption have increased, but equally i=portantly, the diversification of e=ports that would have ensued, would also have prevented the periodic balance of payments crises which have led to a 'stop-go' pattern of economic growth. Much of this is by now conventional wisdom ahout the Philippines, and the purpose of this study is not to question -* these7analyses. oT-r major concern will be with a narrower set of issues which relate to the funct±oning of Philippines- labor markets, and to an examination of the assumtion implicit in the ILO's position that these markets have, and are likely to continue to function efficiently. With rising Labor demand (relative to supply) the benefits of efficient growth would then be transmitted to the working population thlxgh higher real earnings, By contrast, prima facie, there may be a case for suggesting that, such benign and poverty redressing effects -2- of afficient growth cannot be assumed. For in the past the Philioines has had fairly rapid rates of growth in output and employment, but this has not been accompanied by any rise in the real earnings of labor, but rather to its immiserisation. (see Khan (1977) ), .-Unless there are various st=uctural changes fn property relationships and/or the removal of specific rigidities in the fnct±oning of particular labor markets, the translation of higher,albeit more efficient, gro-th rates of output and employment, cannot on this viev be expected to automatically lead to real income gains for the poor majority in the Philippines. Hence in our view, at the moment, the major issue related to labor market performance and poverty redressal in the Philippines is: That is the explanation for the substantial decline in real wages, particularly since the late - 1960' s,.in- a. country which has had substantial economic growth? To answer this question. it is first necessary to e=amine the overall trends in labor demand and supply, and unemployment and underemployment, to see whether the observed real wage trends can be explained by a progressively slackening market for labor, with supply outrunning demand. This is the purpose of Chapter I, which provides a statiatieal review of emploment, u me t and wage trends in. the Philippines over the last t-wo decades. It shows that using various indices, there is little reason to believe that labor- supply has outstripped demand progressively over the past 20 years in the Philippines. On the contrary, there is some evidence of a tightenng of the Philippines labor market over this period, No comfort can be found in this direction for those who would like to explain the real wage decline in simple supply and demand terms, rather than by ttstructure." -3- In ChapCer TI, o ,qe ex e the ctioninl of ?hilippines labor markets in scme detail,- to see whether there are any identifiable rizidit±es in thei7 17ncttontns 7hich could lead to varous t-Mes of segmentation of labor by occupation, i-dustry or region. For such segmentation, could under certain circustances, explain (as the 'structuralists' would bave it) declining real earnings- of majo= categories of labor, even though there was a substantial increase i= overall labor demand Crelative to supply). The major conclusion of this Chapter, however, is that there are no obvious 'truc=Ural' rigidities in the we'Otk4gr of Pi es-labor markets-, and that as would be epected on what may be termed the 'competitive' view of labor markets, varioua wage differentials..have moved in the- wav ne tould expect - within the latter .ramework. This means that neither a simzLe overall demand and supply for labor tramework, or various "structural" hypotheses are likely to be able to explain the real wage decline in the Philippines. Zn Chapter III, therefore, we provide our own explanation of the real wage decline in terms of an application of the well-known Stolper-Samaelson model of an open economy. The latter shows (for a static economy), given differing factor intensities, hos partLcular changes in relative commodity orices can lead to a fall in real wages and in labor's share of national income.. This chapter shows how- the relative commodity price changes in an economy whose goods can be aggregated into three composite commodities - i=portables (which are capital intensive), exportables (which are land intensive) and non-traded goods (which are labor intensive) - would yield the trends in real wages observed in the Philippines. This proposed Zramework is then applied to Philippines wage experience over the last two decades, and is found to provide a surprisingly good explanation of the real wage trends. This fra:ework which emphasizes the relative factor intensity ranking of exportables as being land (rather than labor) intensive, may also be of relevance for pther S. E. Asian countries, and other LDC's whose exports are land or natural resource intensive. causes of the relative commodity price changes which have led to the observed real wage trends. These are shown to be the result of the trade controls. in the late 1950's and eal7 60's,and of specific macro.economic and exchange rate policies that the countr7 has followed. in more recent years.. Eaving provided our diagnos±s, Chapter IV provides our policy conclusions. It distinguishes between what can be termed the long term problem of employment growth, and various short term problems related to the existence of short or medium ru 'distartions' and 'disequilibria' . The former concerns the choice of a second-best optimal growth path of employment and output. This will determine, what we term an intertemporally consistent poverty line, which provides an operational measure of the cut-off line where publfc income transfers (direct or indirect) to. those who fall below it vould appear to be consistent with both the governent's growth and poverty redressal objectives. Using some earlier estimate. we had made of shadow prices for the ?hilippines economy, an estimate of this tater-termporally consistent poerty line is made and found to be.at approximately 1/3 the household income level of imdustrial workers. The Chapter then goes on to discuss various special employment promotion programs and policies which have been (or could be) instituted. In the light of the discussion in previous Chapters, apart from some overall public subsidizati±aof programs for training and providing credit, to those in the non-formal sector, it is argued that many of these special progra-es are lik&ly at 'best to be palliatives, and at worst to be misconceived. The important policy issues concerning employment and wages in the Philippines, center instead on the general macro-economic and exchange rate policies of the government, In this context, a case is made for a relatively neutral macro-economic policy combined with a geauine freely floating exchange rate regime. Chart i - 4-- Labor Foce 2:oove Oucot Ar. unoLoveen x,_, - --t n n a c Total Unmployment n,bo 43orce (Nos. 000) 16N C1 1 -0/ 4 zlome * .o... .000). b197o PrFces) SN N Opn Unemploymet Noa .. (00).) 11e- M n( 02 '6 10~ -3 147 '6 la :3 -0' ' N N N N N N ' Ch C>- c. 0 - Cs cs D, Ch Ch C, >- 0 0 o. o. 0. Cs 11 0- 0- Sourea: Table I9 a7d A.2.2 ...... . ....L -6- I. MPLOYMENT, U.NMMLOYY-ENT AND WAGES - A STATISTICAL, OVERVIEW OF TRENDS AND STRUCTURE 1. Overall Trends in the Labor Force, Eolovment and Unemolovment. Table 1 suarises the aggregate n treds in the labor force, eployment, open unemployment, and a measure of underemployment (developed by Tidalgo (1976)) from 1956 till 1978 for the Phillipines. The figures till 1976 for all the co- ltns except the measure of underemployment are comparable, but those from 1977 onwards refer to a definition of the labor force which was changed from "the population 10 years and older" for pre-1977 to "15 years and above" for the post 1977 period. The measure of underemployment seeks to add the full tine (40 hours worked during the week) equivalent unemployment of the visibly underemployed who are defined as those persons reported employed at work for less than 40 hours during the survey week and wanting additional work. The estimates of this variable t4l1 1973 are those as reported in Tidalgo (1976). Though she does not provide her precise method of est:irating the full time unemployment equivalent of the visibly unemployed, we have assu=ed in our estimates for 1974 till 1976, that 3/4 of those working less than 20 hrs. per week and 1/4 of those working 20 to 39 hours a week are full time equivalent unemployed. These figures are higher than if we had strictly interpreted the visibly underemployed as those working less than 40 hours and want:in additional work. Tidalgo has evidently not taken this latter paren- thesis seriously as the figures we have derived on this strict assumption for the pre-1974 years (given in column 9) are consistently lower than hers. 1/ See the notes to Table 1, for further elucidation of these figures, and our judgement that Tidalgo's estimates as ours in colLm (7) based on her impllcit assumptions overstate the numbers of full time equivalent unemployed, .abor 7orca 2F.nood eeanly "teloved "esr asure - z mm a 1 Chaza. Qvar arcann or ( n o (Pevrcen of Tear >Nos) ?ravious Years (1os) ;revious Yaars (No) :abor 7orcc) (Tos) !Abor Force) (Nis) ýacor :otce) (1) (2) (3) (4) (5) (6) (7) (8) (9) (13) 1956 9,029 8,009, 1,021 11.3 2,013 22.3 1,578 17.5 1957 a,875 - 1.7 8,174 2.1 701 7.9 1,o79 18.9 1,.138 13.0 1958L 9,317- 5.0 8,335 4.7 762 8.2 1,769 19.0 ..a. n.a. 1959 9,345 0.1 8,703 1.8 63- o. , 1,7L 17.9 a.a. E.a. 1960d 9,521 1.9 8,828 1.4. 692 7.3 1,758 18.5 a.a. C.a. 1961 9,995 5.0 9,245 4.7 750 7.3 1,34 18.5 1,265 12.7 962 t0,479 ä.3 9,641 4.3 837 8.0 2,040 19. 1,3b0 13.0 7963 10,710 2.2 10,039 4.1. 670 6.3 1,380 18.3 1.378 12.9 9o 10,398 1.3 10,253 2.1 641 5.9 1,362 17.1 1,1j8 10.8 903 L1,.7 2.1 10,322. 0.7 805 7.2 1,937 16.4 1,4360 13.1 1966 11,821 6.2 10,984 6.4 837' 7.1 1,915 16.o 1,36o l.3 967 12,:>22 6.0 11,526 ý.9 999 3.0 2,135 1/.2 .a. t968, 12,452 . 0.6 - 11,476 - 0.4 976 i.d 2,160 17.3 1,794 14.4 7969- 12,605 1.3 L1,732 2.2. 873 6.9 2,023 16.1 1,370 10.9 197061 12,758 1.2 U1,988 2.2 770 6.0 1,393 14.3 a.a. n.a. i971 12,911 1.2 12,245 2.1 666- 5.2 1,758 13.6 1,037 8.0 1972 13,701 6.1, 12,333. 4.3. 867 6.3. 1,996 14.6 1,249 9,1 .973 IA,140 3.2 13,450 4.8 690 4.9 1,899' 13.4 1,086 7.7 L974 (Aug) L4,244 0.y 13,666 1.6 578 4.1 - 1,6444,. 11.5 946 6.6 1975 (Aug) 15,l61 6.4 14,317 6.2 643 4.2 1,896a8 12.5 1,029 6.3 1976,'Aug) 16.2.44 7.1 1.5,427 6.3 818- 5.0 2,221LÅ 13.7 1,192. 7.3 19774-'cc. 3)15,200 - r4,470 - 730 4.8 .a. . n.a. a.a. '978$-(0c 2)1.6,330 10.7 15,753 8.9 1,077 6.4 n.a. o.a. n.a. a.a. Coo=nd Groweb. XaCas 1956-76 3.0% 3... 1956-51 2.y. 2.9%: 1961-48 3.2*. 3.1= i968-76 3.4%. la fgura.s 11 1973 ara- fra T~a1 (1976). h scatas that chONG amw, dhm full ZUM equivalanc m loymanc of the 'r-iibly under- t=Lovad defined an balow and ware -ddi2na work. However, from. ch. 3ovmber 1973 Labor For a Survy (4C0 Bullecia 3o.e. Table 4) the cal =nDer of dorkars orking under 40 hours and vencing, additional vork as on17 900 chouand, which is les chan the 1200 chousand "fully emmplyean"aeuivalent of dcs workers reportad by Tidalgo in 1973 (colum 7).. Hoever, thera wer aluogethar (858,000 'OrIng lss ean 20 hours and 2,541,000 varking lana chan 39 hours - 3399 chouiand -orkers (including choa amc waancing addi tal vork) vorkng -ej& than 40 hours (CS0 3ullA-ta lo.20 Tahlm- 12). ii in is assud Chac th average hours workad va, 10 for chose under 20, nd 30 for thome bermeen 20 co 39 hors, 9e get rh full c:m. mnLoy~ent cquivalan Ln thousnud at: (3/4 (858) e 1/4 (2,541) - 1,278, uich is.loase to T~dalgo's fgurw. W char*fr£= dda that Tidalgo's estaces rier ca thode vorking laac :han 40 hours (incnuAU thoac mr wanning additionaL vork), and hann. are a rough easur% of the surnlus Labor r±am (b*lov a "full :i=" eCloym m= af 40 ~ours) availabla in the employad labor force. Our estimacs for- 1974 onwards ch.raior are basd on th4s abov assumptioa. ' a=ployad (peuly) ;luj ta !ull 1,. Cq.Jalev t anrpl=y7ent c: ±e visbly -nderc=loyed, defined as ihose persons uorking les7 chan -0 hours a max. /c ,,ina figuraz have been futad in staciaclal Appaend Table A.1, fur the NCS= daca, for hosm working less chan 40 hours and vancing addiional work, and chay corrapod =ore losly ta a nacion of LmvoluncarT undarei2lovmanc, on cha assumpion thar iplicity17 cho ~ann additional work, uld be willing co vork upco 40 hours at chair Current wagen In :2carpolaced valu. by avraging the figuras of cha previous and. tha following yar wich October- and ay surveys. le Incarpolatad valtis by copcing cha avrmg. a,al growth rata of 1968-71. 1f The labor forra definition for rhs years tz differene, it is far the populacion 1.5 years and older, a co=ared vith 10 years and above for earlier years. See =ate a above fr ±-e basis af cc:puLkng these fgur-s. ..... .... -8 A number of stylised facts about the Phillipines economy's labor market performance can be gleamed from Table 1. - -(a-)- Labor SuoDly and EmDloyment .. . -- - - First, between 1956-1976, overall employment grew at the rate of 3.3% p.a. which was slightly higher than the growth rate of the labor force of 3% per annum. This twenty year period can be usefully divided into 3 sub-periods, which correspond roughly to three distinct periods in the Phillipine trade and exchange control regimes. (1) 1956-61, was the period of fairly intense exchange controls and emphasis on import substituting industrialization (2) 1961-68, was a period of some liberalization of trade and exchange controls, and (3) 1968-1976, which is the period when there has been a move to a more flexible exchange rate policy, with some relaxation of trade controls. During these 3 subperiods, we find that from-one sub-period to the next both the average growth rates of the labor force and employment are accelarating, with the two being roughly the same (3.1-3.2%) in the 1961-68 period, but with the growth rate of employment higher than that of the labor force in the other two periods. (b) Unemployment Secondly, the three measures of unemployment show that there has been a marked decline in the "total" unemployment rate (that is the openly unemployed as well as the full time unemployment equivalent of those working less than 40 hours - the visibly unemployed), and some slight decline in the open unemployment rate between 1956-76. These declines have, moreover, been most marked in the third of our sub-periods distinguished above, namely since 1968 (see Chart ). - 9 - 'able 2: LABOR FORCE PARICI.ATON ?,ATES 3Y SEX, AG, GROUF, PHILI2I1?ES, URBA.N ANDi 0W3ER 0956, OCOBER 1965, .AUGST 1971, STVE3ER 1972, 3~-ER '973, AUGS 1 974, .975, JLQ L76 1-' 2.-4 45 54 5 10 -2-4 25- 45 -64 65- :ocal Years Years Years Years Total Tears- Years Years Years 1956 56.8 45.3 71.4. 69.0 31.6 Vale- 1965 53.1 38.4 69.6 69.5 38.5. 1956 73.4 55.1 95.9 90.1L 47.4 1967 54.5 37.5 73.9 71.7 40.6- 1976- 68.1 44.0 97.6 93.1 56.8 1971 49.5 33.0 68.4 66.0 33.7 1972 48.4 32.4 67.3 65.7 34.5 emale- 1973 50.4 35.4 69.1 65.6 34.9 1974 49.4 33.3 67.7 66.0 38.0 1956 41.0 35.9. 48.6 47.6 18.0 1975 51.0 35.2 69.6 67.4 36.9 1976 36.0 27.4 46.7 45.3 20.3 1976 51.3 31.7 70.9 68.8 38.1 male Female 0 - 24 25 - 44 45 - 64 65÷ 10 - 24 25 - 44 45 - 64 65- Total Years Years Years Years Total Years Years Years Years urban 1965 65.9 39.0 96.4. 92.5 43.9 37.5 32.8 46.7' 39.5 15.8 1967 62.0 32.3 95.9 92.0 48.6 35.8 28.7 47.6. 39.9 L5.0 1971 61.1 31.4 95.0 89.5 37.4. 35.4 30.2 46.0 35.9 12.2 1972 58.6 29.3 95.1 88.9 36.2 34.2 27.7 45.7 37.4 16.6 1973 60.2 32.0 95.2 86.5 37.5 36.6 30.3 49.1 38.3 9.9 1974 59.3 31.1. 93.9 86.1 41.2 35.5 29.1 48.4 37.0 L5.4 1975 59.2 30.5 94.9 87.7 34.5 37.3 29.9- 51.8 39.8 12.2 19-76 59.0 30.8 96.1 87.8 34.5 37.7 29.1 53.7 41.3 12.1 Rura!t 1965 73.7 51.8 97.7* 96.0- 62.1 34.2 27.3 40. T 44.8 23.4 1967 72.3- 49.2 98.3 96.7 65.1 . 42.4. 32.4 53.6 52.1 24.2 1971 70.0 45.5 97. 1 94.4. 59.7 30.4. 22.4 39.6 39.7 17.2 1972 70.2 47.4 97.7 94.3 60.3 28.7 20.5 37.1 39.8 13.1 1973 71.9 50.8 97.9 94.0 60.3 31.1 23.2 39.6 40.8 19.1 1974 71.0 48.2 97.6 95.1 63.7 29.7 22.0 . 36.& 40.8 23.6 1975 75.2 50.0 97.7 95.7 65.9 32.6 24.5 40.4 43.2 24.9 1976 72.5 50.4 98.3 95.7 67'.3 35.0 26.3 42.9 47.6 25.1 -5 ta: lreun of Census and Statistics Labor Forca Surveys for datas. indicated. -//，… Thus fzam these 4--dices of labor =arkat a=ca, at least, the ?%illliplres economy could be said to have perfor=ed fa:L-17 wl-71 Over the last tva decades. It could-be argued, hcwever, chat the above statistics are misleading in so far as- they asmima that there is no "discouraged worker" effect which may have kept down the labor force participation rates, and heaca understated the truly flavailLable" labor force. (c) Labor-Force ParticiDat-ion Rates Tables 2 and 3, therefore sumna ise the data an labor force participa- tion rates (LZIRP), (by age, sex and. rural., urban residence from 1956 till 1976) and an the re-oorted reasons for those not in the labor force not wanting work.i/ For both sexes, and All ?hdlliplres the LFPR's have dec-71ned by about 8 to 9% in the two decades since 1956. This is largely due to a decline in the -participation rate- af those betwee= the ages of 10-24, which can- be explained in terms of both the increased availabillit:y of educational facilities as well as h1gher inc=es (see Encar-aacion et al (1976)). Looking at the urban-cural. population, apart frttm the young, there has also been a decline in the participation rate of both older urban --azi and ,.-omen Q6.5 yea q and Over), which agai= is to be e=ected with rising incomes. Eowaver, -vini'st the participat .oa ra'ta of arban wc=en in their pr4--e (25-64 yen s) rose, that of middle aged urban men (43-64) years fall between 1965 and 1976 (by about 9%) and this could to some extent have been the result of 1/ :-he daca reported are from the NC5G labor force Statiscic_% Ruprechr (1966) has recomputed the NCSO labor force Statistics using Lorimer (1965)s higher est4mates of population growth (3.2% as c=pared with the NCS0 estimates of 3% p.a.) between 1956 till 1962, and shows lower participation rates tban those prov-,;-ded by ZITCSO data. This likely bias in the NCSO participation rate data should be noted, though we ig-nore it in what follows. 2/ We have not beer- able to provide any explanation for this decline, which clearly merits further investigation. ―·「，··＝ a "discouraged worker eff-ect". 37 cont-rasit in rurza! areas, apart from young males and females, there is no noticeable decline in LIESIR's, and surprisingly a -nnall rise, in the participation rates of both older men and women (6:-+ 7ears) , between 1963 and 1976. That the predominant reason for the def-I ine in LMR's is the increase- in educational fac-llit-',- for-both men. and women is borne out by Table 3, where (apart from housekee-o-f-g for f-ales) the reason increasingly be4rg gi-7en fur not wanting -work is that the person is "gai:ng to school". 2. The Changing Str-acture of Z=1ovment and Out-out (a) Sectoral Comnosition Table 4 mrovides data on the structure of e=lovment and output by broad industry classification - agriculture (A), iadustr7 (I) and services (S), from 1956 to 1977. Th-4-s table shows a shift: in emolo7me: t from ag--iculture to services, and marginall-7 to indust=7 between 1956-77. By cont--ast.the share of agriculture in total out?uc has decreased much lass, the share of ser7ices has been rcughl7 cons- C=t (at about 40Z), whilst that of industry has increased from about 27 to 29%. (b Raaional Strruccure Table 5(a) & (b),(c) pravides the data an the labor force, e=ployment b7 broad Industrial class if icatiorr- (agriculture and non-agricullture) and on unem- plo7ment by region,-!/ f-rom 1967-76. From these id will be seen, that be=ween 1967 1974, for all regions except lian-fla and suburbs, Central Luzon and Southern LuzQn, well over half of the labor force was empla7ed in agriculture, and except 1/ No time series by region of emrployment and output by any finer industrial classification was available. 2/ Note that the regional classification changed between 1974 and 1975, so that, the regional data for the two periods is not strictly comparable. . ' � . � � �, . � 7 � . � , т� 1 3 - т,йtа 3СЫ. rena.ul иг ииол 3nарг sиrlтхл ку sгrlсииvиг, wЧ-асхlшсТинr:, аггэ uыwaurrlu ру rпс3он 6716)-197г) .�..__._.._ - 1 --- - -° -- - - „Т с.1 �.w.г rлгс. __У-s1�гг�.!:! LiLцls,.c. _frilгrsll� }Nп•бвсlt 1t�г �Q 1,� � i9ы lпаiчся 1чп `-i'яга wп ю71 �яг,�") �iяс� 1яь! )яп иц 3f�1 1l74 !яа) Dяы яf! 11)� `�s7г С9тi iiii 1яiГ-ГQ'dj""" 1�1 14г� -1яi:ТtчГi- "I'9ic rми�УУ1.... 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Ч.к 7s.� 73.) а1.! и.9 кк.г а�.й 17.6 х1.б 1l.к 3.3 1.1 4.� 2.7 3.г г.s 3.и ■аг.ью, � 1У. �еисг+3 Wг 1,б92 1.вь9 1.}9U 1.l9(. l,б0й !,7l1 i,nAf й].2 у).1 гl.4 40.5 г1.и ц.е ]9 J 56.е Ч.в f1.0 37.1 33.7 i7.9 3к.3 31.0 15.7 ).6 с.] � 4./ f.] !.0 ч. s�.�cьcn. t.+�. 1,йба 1.s2и 3,cno 1,7и�. l,яея 1,fй9 к.33) 4с.ч 15.к t0.e эй.б 3к.7 v.f 12.) 3).1 гб.3 г9.6 36.! 3г.3 35.) f3.t 3.t 1.0 !.б в.3 9.�1 б.г 6.1 �. vc. ы с.1 ь м..ь.и 1,оц t,тгб 7.1и 1,�я, 1.о17 l,оп 3,:о< б2.в ьй.Р 65.) s).7 s1.f ад.к а.б ».к тя.к л.б U.4 и-в �е.а ц.3 }а.! б.е г.7 !.а s.ь ь.3 1.3 vn. uwutu Ч1.су>. 3,JCO 1,ги3 1,й61 1.с�ь t,ar6 3,цб i.c7s 6ь.3 1о.4 ы.ь 33.s и:.а sбл бо.й �3.f ц.� г5.3 ьl.к тs.о го.о ц.б е.г 1.1 s.4 �.а ).а 3.3 г.о . v3n. ►.+с.г. v1..y.. 1,яsь 2. пь 2,ы72 т,1s, x,n9 к,3ьо к.з9s sя s sкл s).о s].б st.t sss 61.к <л,3 цд 33.1 ь1-к 37.) с1.С ц.к f.1 s.1 1.f s.: в.л 5.г э.в 1У. tw п4ьги мсwJ+пво я1( 1.11! яо2 1,й1i 1,123 1,Ос3 l,268 SЧ.7 :l.1 б1.б 67.1 63.! б{.} 1 L 3 й0.5 03.0 ц.б ц.г ID.I 30,0 tl.i 3.3 b.1 �.к ).й 3.: ].7 L 9 х, s..�мьсгл мlпа.��... 3,Чйб 1,)11 1,slв 1,7r. 2.ost 3,9r) 7.os1 )о 7 �,�.t )4.1 бг.! ья.! 7).} t1.f ач.9 1в.я д:.¢ ц.к кs.я 1й.f кs.t 3.к 1.7 3.д 1.1 <.1 7.ь а.1 JnJ 5и1и диигс. .С д+и� wг.w ог k���u+ •ид ысr.ц.сlс. l.+bu. Verc, и�гvву,, ucmL.c 1яс7 w м,� 197й. 1 � I . i 1 1 1 1 1 1 � 1 � 1 1 .� Tutle PLRCEUT DISTRIBUTION ol,' J-ERS0ØS Til 'lliZ lAWil VOU4 1MILTYPINES. ý1EUMARY 1975. AUGUST 1975 AUD AUGUST 19?6 February 1975 Auguat 1975 Auguat 1976 1.abor Force I.abor Yorce ].&bor Varce Region um,ber rereýat IýýurløyLd vilemployed 1ýlmseý ýCrcoýt Employe4 Unemplayod lýugher porcelli: Employýd 01ý wij.14JYLd (00) All Region$ 14,264 100.0 96.4 3.6 15.161 100.0 95.8 4.2 16,244 1110.0 95.G 53) Region I - Illocod R.ýgion 1.b33 100.0 95.8 4.2 1,134 IOG.0 96.7 3.3 1,234 100.0 96.8 3.2 Resløn 11 CeBayfin Valley 653 1OG.O 99.5 0,5 2.2 '653 IOG.O 97.8 697 100.0 95.0 5.0 Region 111 Central Luzon 1,452 100.0 94.3 5.7 1,463 100.0 94.7 ý.3 1,645 100.0 93.1 6.9 Reglotia TV und IVA - Soutliern 3,556 100.0 92,8 7.2 3,7ý7 100.0 92.0 B.,O 4,fi59 100.9 92.8 7.2 Tusglog and Hetro Hunilm Reglan V bleol Region 1,0-13 100,0 9a.7 1.3 1,162 100.0 99.1 0.9 1,194 100.0 97.? 2.3 Region VI wearerlý V1uayus 1>284 100.0 97.2 2.8 l.ý47 100.0 95.1 4.9 1.477 100.0 $4.6 5.4 Region vil caticrat Viaý1y45 1,257 100.0 97.5 2.5 1,337 100.0 95.0 5.0 1,398 100,0 94.5 5.5 Region VIII Eagtern Viailyaa 11» 100.0 98.2 1.8 948 100.0 qB.ý 1.2 949 100.0 ".2 1.8 Region IX - western mindýmao 6?6 100.0 99.0 1.0 718 100.0 99.4 0.6 761 100.0 94.1 5.9 Ucgion X - fiortheru Mindawm 761 100.6 98.7 1,3 903 100.8 97.1 2.9 997 100.0 ý6.7 3.3 Region XI - Sauthern MIndanaG 916 100.0 99.1 6.9 881 100.0 99.2 0.8 964 100,0 97.8 2.2 Refitolk XII - Central 11111'holuo 744 100,0 98.2 1.8 847 100.0 97.4 2.ý efil 100.0 ý6-j 3.9 Source øf Dato: NGSO Survey af Hooa-bolda. Tible 5-C; PERCEIfr D[STIMSUTION Ok, E'IDYE0 ERSON 4N ACICNÅ CULJR AN0 NON-AGIqJLTURAL IMUSTRIES bY REGION AiQ YEAR, 11i11lIPPINES: FEBRUARY 1975, ÅUGST 1975 AUD AUGUST 1976 Fdbruary 1975 Augu 1975 August 1976 1.abor Force Labor Force ,abor Forca Region Number Parcent Eiaployed Unemployed lumber' Percept Em"oyed Unemplyed Number derceng Employµd pngmployed (000)> (000) All Rugions 13,7611 100.0 54.'4 45.6 14,517 100.0 53.5 46.5 15,427 100.0 52.7 47.3 Region i - Ilocoa Region 990 100.0 62.0 38.0 1,097 300.0 41.6 38.4 '1,194 100.0 60.6 3.5 Region II - Cagayan Valley 650 100.0 79,3 20.7 638 100.0 75.8 24.2 662 100.0 69.6 30.4 Region 111 - Central Luzon 1,369 100.0 42?5 57. 1,403 100.0 39.5 60.5 1,531 100.0 38.9 01.1 Region2 IV and TV-A Soutlhern Taga log and Hetro Hintla 3,302 100.0 25.11 74.2 3,448 100.0 25.7 74.3 3,765 100.0 24.4 75.6 Region V - Blcol 1,059 100.0 bl.11 38.2 1,152 100.0 57.2 42.8 1,166 100.0 61.1 38.9 Region V1 - Western Visnyus 1,248 100.0 63.6 36.4 1,281 100.0 60.5 39.5 1,397 100,0 59.6 40.5 Region VII - Central Visayas 1,226 100.0 55.9 44.1 1,270 190.0 53.3 46.7 1,321 100.0 53.8 46.2 Region VLTI-- Eatern Visayas 861 100.0 LI7.f1 32.2 936 100.0 69.0 31.0 932 100.0 69.1 31.0 Region IX - Western Hindi'n4o 669 100.0 69.7 30.3 714 100.0 68.5 31.5 716 100.0 69.6 30.4 Region X - NortLer Hindut-o 751 100.0 77.9 22.1 877 100.0 76,9 23.1 964 100.0 77.5 22.4 Region XI - Southern Hindanuo 909 100.0 71.6 28.4 874 100.0 74.4 25.6 943 100.0 74.0 Z,5.9 Region Xi - Central HIndjao 731 100.0 70.3 ?9.7 826 100.0 72.1 27.9 833 100.0 70.2 "9.8 Source of Daca. NCSO Survey of Uuulluh"lds, Table 6: DISTRIBUTION OF EMPLOYMENT BY MAJOR INDUSTRY GROUP, SEX, RURAL AND URBAN 1965 and 1976 Agriculture, Mining & Transport, Forestry & Manufac- Construc- Storage and Domestic All Other Fishing turing tion Commerce Communication Services Industries Males 1955 66.5 8.4 4.1 6.7 4.9 1.1 8.2 1976 61.7 9.4 4.8 7.8 5.311 9.8 Females 1965 38.1 19.2 0.1 18.9 0.4 11.7 11.4 1976 35.9 14.7 0.2 20.0 0.4 12.7 16.2 Rural 1965 73.7 9.1 2.2 6.9 1.9 2.1 4.3 1976 75.1 7.4 2.0 6.1 2.5 1.5 5.3 Urban 1965 16.8 19.2 4.5 19.8 7.4 10.6 21.8 1976 9.5 16.7 4.8 23.8 6.3 12.2 26.7 Source: Table A.4. .f - 18 - to 72%) and Bicol & Eastern Visayas where it was roughly constant (at about 60%), the share of employment in agriculture declined. During this period there is also a declining trend in t.he open unemployment rate in every region except Manila, Ilocos and Cayayan Valley where despite marked annual fluctuations no clear trend can be ascertained. (c) Emrlovment Structure by' Sex and Urban-Rural Residence: Table 6 summarises the data on the changing structure of employment by sex and by rural-urban residence, between 1965 and 1976. There was some shift in male employment from agriculture (still accounting for nearly 62% of male employ- ment in 1976) towards in particular: mining and manufacturing, commerce and other industries. Female employment shifted towards the service industries (commerce, domestic services and other industries) from both agriculture and mining and manu- facturing between 1965 and 1976, though these two latter sectors still accounted for about, 50% of female employment in 1976. Rural employment was as to be expected dominated by agriculture (whose share actually rose slightly from 74 to 75% between 1965 and 1976), whilst the share of mining and manufacturing together remained roughly constant at about 13%, though within these two sectors there was a shift towards the other industries from mining and manufacturing. There was thus a small decline in the share of rural non-farm employment during the decade, with some evidence of a slight shift within the non-farm "sector" towards the minor manufacturing industries (including handi- crafts) from the "organised" industrial sector. ... ... ........ .. - 19 - There was a marked increase in the share of urban employnent in the services (commerce and domestic services, which together increased their share from 30% in 1965 to 36% in 1976) and the "unorganized" other industries sector (whose share rose from 22 to 27%) of urban employment during the decade. - 20 - Table 7: TREND RATES OF GROWTE (%) BY INDUSTRY Emulovment 1956 1961 1968 1956 - 61 - 68 - 77 - 77 All Ind. 3.32 3.98 2.90 3.26 Agriculture 3.47 2.18 2.19 2.16 Industry 2.91 3.92 3.54 3.30 Services 3.26 7.61 3.94 5.39 Mining 5.11 4.46 3.55 4.87 Manufacturing 2.64 3.46 3.31 2.74 Construction 4.53 4.97 3.96 4.94 Electricity -2.37 2.34 7.68 5.07 Transportation 6.83 2.58 5.11 4.91 Comunication 1.42 6.26 5.97 4.34 Other Services 3.84 6.86 5.32 5.90 Real Output 1956 1961 1968 1956 - 61 - 68 - 77 - 77 All Ind. 4.34 4.71 5.36 4.74 Agriculture 3.79 4.21 4.02 3.98 Industry 4.25 5.76 7.43 5.76 Services 4.81 4.45 5.02 4.69 Mining 2.96 7.12 7.21 7.55 Manufacturingq 5.98 5.69 6.09 5.73 Construction -1.18 5.73 12.48 5.28 Electricity 3.08 4.10 9.34 5.59 Transportation 5.06 5.07 7.05 5.66 Communication 4.64 4.22 4.33 4.28 Other Services 5.00 4.43 5.70 5.13 Source: Derived from Table A-2. 1/ These trend growtf riies-(U have b,an derived from the equation log x = a + bt where x = A291cytznt /output, and t = time, then2(= antilog(b-1). - 21 - Taole 8: MPLOYMENT GENERATON 3Y SECTOR 1956-1977 (in thousands, except percent) All Industries Agri Industry Services Net Total Employment Generated A E. 7283 2498 1376 3409 1 (1956 to 1977) Average Net Annual Employment Generated 346.7 119.0 65.5 162.3 EdA E. 1 21 Net Total Employment Generation as a % of 1956 Employment 94.6% 54.9% 113.1% 176.0% Level Source: Derived from Table A-2 - 22 - 3. Sectoral Labor Absorption (a) EmDlovmnet and Outvut Growth Table 7 provides estimates of the trend rates of growth in employment and output by the 3 major sectors, and their major sub-sectors for 1956-77, and our three subperiods distinguished above. During the period as a whole employ- ment growth has been highest in services and the lowest in agriculture, whilst real output growth has been highest in manufacturing and lowest in agriculture. In the subperiods, the rate of growth of agricultural employment declined as between the first and second periods and was then roughly constant at about 2.2%. The rate of industrial employment growth rose between the first and second pe- riods and then declined to about 3.5 %. The rate of growth of employment rose substantially in the second period to about 7.6%, and then fell back to about 3% in the third period. Finally, of the subsectors, other services have had the largest employment growth rates, with that in manufacturing being a little higher (and accelerating over the 2nd and third sub-periods) than agriculture. Table 8 provides estimates of the net total employment generated-L/ and various related indices for ot. 3 broad sectors (agriculture, industry and services) between 1956 and 1977. From this table it will be seen that services provided the highest employ- ment generation of roughly 162,000 jobs a year between 1956 and 1977, followed by agriculture with 119,000 and industry of only 65,500. If account is taken however, of the initial relative sizes of the three sectors, in tets of their share in total employment at the base data of 1956, then we find that the net total employment generated as a percentage of the 1956 employment level was highest in services (176%) 1/ This has been derived by adding the yearly differences (appropriately signed) in the respective sectoral employment levels. The measure takes no account of any labor turnover which did not lead to a net change in annual employ- ment in the sector. This measure has also been used by Tidalgo (1976) for the 1956-73 period. - 23 - Table 9: SECTORAL E!,PLOYVENT - OUTPUT ELASTICITIES 1956-61 1961-68 1956-68 1968-77 1956-77 All Industries 0..76 0.86 0.89 0.55 0.69 Agriculture 0.91 0.56 0.71 0.54* 0.55 Industry 0.66* 0.70 0.77 0.50 0.57 Services 0.68* 1.68 1.38 0.81 1.14 Mining and Quarrying 0.62* 0.85* 0.90 0.54* 0.65 Manufacturing 0.36* 0.62* 0.64 0.54 0.48 Construction 0.47* 0.67 1.14 0.30 0.72 Electricity, 0.01* 0.34* 0.80* 0.84 0.88 Transport, Commer- 1.35 0.51 1.05 0.72 0.86 cial and Storage Comerce 0,32 1.47 1.26 1.31 1.01 Other Services 0.78 1.46 1.13 0.93 1.14 Source: Table A-5. * Not significant at 5% or lower level. fol'cwed by iz.ustr7(22% lowest agrcutuz2(%) Given our sectoral data on employment and real output from 1956 to 2.977 (in Table A 2), we have next derived sectoral employment-output elasticities (in Table A.5) for various periods. The values for the ,3 major sectors and the sub-sectors for the whole 1956-77 period, and ou= three sub-periods 1956-61, 1961-68 and 1968-77 are summarised in Table 9. From this table it will be seen that for the whole 1956-77 period for which all the elasticities. are significant at least at the 5% level, the economy wide elasticity was about 0.7, with that for services being the highest (1.1), followed by commerce (1.0), and then transport aum utilities of about 0.9 followed by construction (0.7), mining (0.7), agricul- ture (0.6), with manufacturing having the lowest (0.5). For the two major sub-periods 1956-68 and 1968-77, (though some of the elasticities are not significant) we find that there is. a decline in all the employ- ment output elasticities, except for commerce (which remained eonstant at 1.3) and utilities (at a value of 0.8). Looking at a further subdivision of the 1956-68 period into' the 1956-61 and 1961-68 periods, we find not surprisingly (because of the reduced degrees of freedom) that many of the elasticities ceaseibeing, s4gniicant. For those which are, we find a rise in the overall employment-output elastLcIty from the first sub-period (1956-61) to the next (1961-68), but then a large fall in the next sub-period (1968-77) from 0.9 to 0.6. The agricultural elasticity declined between the first two sub-periods from 0.9 to 0.6, but those for commerce and other services rose from 0.3 to 1.5 and 0.8 to 1.5 respectively. (br-Canin abr Intens±tLes - In Table 10, we present evidence of the changing sectoral labor output ratios in the economy, as a rough measure of changing sectoral labor intensity (measured by man-years per thousand pesos of output produced). Looking at the whole 1956-1977 period, all sectors except servicmshad lower incremental labor output Table 30; SECTORAL LABOR-OUTPUT RATIOS EAE/Y /Y E/Y __ _141Y E/Y IVAY 1956 1956-68 1956-77 1977 1968 1968-73 1968-77 1973 1973-77 All Industries *335 -288 -182 *238 .315 -137 *107 *279 -083 Agriculture -555 -510 -227 (-35) .-367 (*41) -538 -170 --027 (*19) -484 --156 (-21) Industry -225 -141 -106 -141 .188 -031 .088 -344 -133 Services -204 .218 -213 .210 .210 -216 *209 *211 -204 Mining & Quarrying -100 -052 -063 .072 -077 -030 -068 *057 .155 Manufacturing -260 .118 -103 -151 .190 -024 *092 -144 -183 Construction -168 -400 -123 .135 -232 -053 -078 193 -083 LA Electricity, Gas & Water -173 -013 -124 -139 -117 -175 -155 .132 -148 Transport, Communica- tion & Storage -292 -241 -263 -272 -270 -331 -275 r285 -235 Commerce -146 -152 -129 *136 -148 -091 -110 -139 -125 Other Services .283 -324 *309 -300 -301 -301 -299 -301 -298 Source: Derived from Table A-2. E - Man years Y - Thousand pesos E/Y - Labor intensity WAEdY - Incremental labor intensity. The figures in brackets are for periods ending in 1976, for agriculture. - 26 - ratios compared with their labor intensity in 1956. Looking at the whole period in terms of thzee sub-periods; (a) 1956-68, (b) 1968-73 and (c) 1973-77, we find that during the first sub-period, the incre- mental labor output ratios of. onl7 services and construction were higher than the labor intensity in the base year 1956. During the secotd sub-period (1,968-73), however, whilst services continued to have a higher incremental labor-output ratio than its base year (1968) labor intensity, this was no longer true of costrurzion, whose incremental labor inten- sity fell drastically during this period (from 0.4 in the previous period to 0.05) util- ities (electricit7, gas, etc., and transport communications storage) changed their pattern in this period as compared with the earlier one, and had a higher incremental labor racio than the 1968 base year labor intensity. Wen we consider the third sub-period (1973-77) , we find. that during this period, for the first time manufacturing had a higher incremental labor-output ratio than the base year (1973) labor intensity, and this was also true of mining and quarr7ing, and once again of electricity, gas, etc., but no longer for transport and communications or services (for which the two ratios were the same) Broadly speaking therefore, there is evidence of a continuing decline in overall labor intensity in the Phillipines since 1956. Apart, from services which had steadily rising labor intensity till 1973, since when it has remained roughly constant, all the other sectors have had a decline in their labor intensity over the period, except that, during the most recent period (1973-77) mining and manufacturing seen to have increased their labor intensity. 1/ It should be noted that, the negative incremental labor-output ratios for agriculture for the 1968-77 and 1973-77 period are because of a very large fall in agricultural employment between 1976 and 1977, therezore, it may be more meaningful to consider estimates for the period ending in 1976. These are the estimates given in brackets in Table 10. -7- Table 11: PERCENTAGE SEARE OF LA3OR COST IN TOTAL COST OF PRODUCTION IN LARGE ESTABLISHMENTS IN PHILIPPINES: 1961 AND 1967 Industry Percentage Share of Labor Cost 1961 1967 Logging 29.6 29.5 Mining and Quarrying 37.8 26.8 Manufacturing 16.7 12.8 Construction 26.4 33.7 Utilities 37.2 - 24.0 Commerce 6.5 6.2 Transportation 39.8 30.0 Communication 58.9 59.7 Services 35.8 44.8 Source: 1961 and 1967 Economic Census. -- 28 -- T7blP 12: FR.W OF r1O,T L SOE 7NUSTRirS -OR SOME Y:A-S: 19f6-73 Met Total Employ- åer :Lical aaCU G.LIcracIOLI Cf Ecolovmet Generatfon t--'oy7ent Sub-industry as 1966- 1967- 1968- 1971- 1972- Generatfon, Percentage of the Industry Group 1967 1968- 1971. 1972- 1973 1966-73 Tocal (positive or negative) for Che Industry Agricltura, forasr7 H=ning and. fish±g 379 (245) (327) 817 399 1,023 100.0 (100.0) Rica & corn far=ing 181. ( 83) (243) 365 395 615 42.1 Coconur. farming 39 17 (104) 128 73 153 10.5 Sugar can farming 36 ( 43). 37 27 (31) 26 1.8 Abaca & other fibers farming 6· ( 36) ( 54) 2 ( 1) ( 83) ( 18.9) Tobacco farming (20) 9 ( 45) 37 25 6 0.4 Other cropa, hortIculvurc poultry, l!vesock producion 14 ( 1) (349) ( 3) ( 352) ( 80.2) Producr not spercif;ed 84 ( 75) 351 123 - 483 33.1 Agricultural. service - - 8 1 9 18 1.2 Hunting and fUking 6 ( 16) 66- 155 (52) 159 10.9 Forestry including logging and forestry services 33' ('17) 6 ( 7) (19) ( 4) ( 0.9) ConstrucrIon 9 125 ( 5a 137 100.0 Road and brl-dge consruct.ion- 24 39 ( 6) 3 60 43.8 Building conasruction (15) 86 ( 3) 2 70 51.1 Other construcrion - 4 3 7 5.1 Tansport, storage and comnication ( 6) ( 5) 149 (35) 23 126 100.0 (100.0) Road. passenger transport 22 1 133 ( 7) 5 154 100.0 Other transport, brokeraga (27) 12. 9 (37) 21 (22) ( 75.9) Storage,, wahousing,. connjxiaor. ( 1) ( 18) 7 9 ( 4) ( 7) ( 24.1) Cc=erce 55 27 263 41 7 393 100.0 (100.0) Wholesale trade 19 23 73 (30) (16) 69 15.2 Sar±-sar4 stora (29) 13 70 16 60 10 2.2 HawkIng and peddling 32 ( 54) ( 34) (16) 10 ( 62) (100.0) Other, rerpH l trade 29 32 131. 63 4Z, 303 66.6 Banks, real estate, insuranca- 4- 1.3 23 8 25 73 16.0 Governan, comunit7 business, recreaironal services 30 (45) 311. (107) 54 333 100.0 (100.0) Public. schools la 17 102 t47) 33 ' 123 36.9 Prvate schools 7' 1 30 ( 7) 13 44 13.2 Schoola not. specified - - - ( 1) - ( 1) (100.0) Governman sarrices excluding schools 1 25 85 (13) 13 111 33.3 Private comunit7, business, recreati±onal services 4 1. 94 ( 39) ( 5) 55 16.5 Source: Bureau of the Cansus and Statlszics' Annual Survev of Yanufactures for the dates indicatad in the table. As reportad in Tidalgo (1976), Table 8. - 29 - arther evidence on the changing labor intensity of aroduction is provedadn La Taola 1, which su-marises the data from the 1961 and 1967 Economic C-nsus, on the percentage share of labor cost in the total cost of production for large establishments- ia the Phillipines. This shows that only in services and construction did labor intensity (measured by the- share of labor ca_ts In total production costs) rise, whilst it fell in mining, manufacturing, ut-tilities and transportation, and remained roughly constant in the other industries during this period. (c) Sectoral Contribution to Labo-r Absottian it may be useful to see. the contribution to labor absorption by a more disaggregated industry classification. Tidalgo (1976) has provided estimates for a number of years from 1966 till 1973, of the employment generated in a number of the sub-industry groups. These estimates are reproduced in Table 12. There is a surprisingly large fall in total employment in abaca and other fibres and horticulture, poultry and livestocks, but as Tidalgo comments "one-should not ... discount the possibility of a statistical artifact resulting fron the 1971 change in sample design!". In the other sub-sectors, in cons truction, road and bridge and building construction accounted for nearly all the net employ- ment generation between 1966-1973, whilst in transport, storage and communication it was entirely road.passenger transport, which probably reflects the growth of labor intensive small transport vehicles like jeepneys- in the services sector, which as we have seen from Table 10, is the only sector which increased its labor intensity over the 1956-73 period, other retail trade ( that is apart from sari-sari stores and hawking and peddling) was the highest employment generator, followed by educational services and other government services. Despite the usual fears that employment expansion in the services sector is in dead end work sharing type of activities in the so-called "informal" sector, � ;г . . ь -зо� abZг+е1Э: C�:;G'..S �1 2„°LO'С'z'`ГР 5'1'�IIC.^и?? '�i u.�:tŭFлC:L'В"yfG, 195b-197fi /а /Ъ /с t3„ ` , ' Sc-1:c:�are ?-гсвпса¢е Oiar_35ис_оп ,+,nausl ;аса оЕ grovta (Х) +3'оцsепаl,д/ :осц Росиепоlд/ "`� 7Саг fдог�ап:гед г"SCCOrq (ОЯО'i) Jпос;таiггд гдеtос7 � СгL 19Sб П5 1956/66 (?5оlТб 1456 756,191 ZOS,309 96Z 78.6 :1.4 100.0 Тоса1 �- ' :957 78LЬ+Э 2®.',.53I 1.aQS 17.8 :2.2 t00.II ?.iоуггаt ..32 :,+8 7.13 1958 ЬЭ8,оi3 :<3.]07 927 7�.: Z4.fi 100.0 195Э 153,3:4 '.:8,5аб 992 75.9 24.1 100.0 -зtсягу� ;.75 �.15 5.13 t960 787,:19 ?+3,78I 1,ОЭЬ 76.� 24.J 100.А • 1эы n3,sz, г:s,.7з :,зsг. 7з.s zь.3 io0.o >,v�erald� 19ьз аза,аl7 з00,за3 1.г3э 7з.s гs.j 1со.0 ;1ааг;з�г=д !.ьз !.тг 1.sз 196ч (a�y) 4�З,�аS 31б,+15 1,�4$ 74.Ь 25.�+ 1С0.0 196з 777,23�7 3Z3,T70 1,131 10.о . 2g.+ 100.0 1966 901,51•Ь 727,�54 I,229 73.л ' ?Ь.Ь 100.0 . t968 д�9,564 394,3Эб !,334. 5д.�3 72_0 100.� , -.__.._ _ _ - - -_ - - - 1969 (:�.У) 383,4Э5 ц02,064 1,391 53.9 ]L.1 I00.0 � 1970 (;'ау) 944,33о �+JЭ,75б L,39S1d 7I.1 'г3.8 1д0.0 ;?71 :.�l3,г12 420,988• 1.+79 'r0.7 29.3 100.0 , 157. а58.05о 53,,94� i.�96 oi.5 38.5 100.0 . 1975 391.0�7 531,97� 1,�2а 52.о 37.4 109.0 Е?7b 1,0�9,133 53G,331/е l,530 5Z.5 17,5 100.J � ,, /з Erlesa oc�aгxise Ldfcatгd ага гг.?nrs сд c:n аоас: о: Сасаnаг аг rзд� уеаг. '/Ъ r.picмдenC iд '.�с :.я:гчвiiдlд sеааг 15 дгtiгед as а rьsidul .ras 5v'ае:аес=..3 :�е .засяг7 set_оС � (escao.I.iд,:г::ts aepiayi_g гс lгаsс :_•rr •дr'.carsl аг3 .ясц с.sаигзе_x:ag г=оiлp3еюс. iti L_i�гв з11 :_ �n м_р1оу3� епе :я :с� •.�rxers, ц= г.сиаг..яlд '.a..�usc-{as, sa�e :arier := _s дса �o�s:S17, а !ar,e�¢+_аег оЕ сяс_ags �.ди.,;гi r�'_дсгrгд :i�': с:а ;WC'�.i (цacar�i .#sза•ца.саа oi �с-зgг L.dusc__ns 2avrio�ct�гac � .�ис::отlг7) . ' • • - ' 1с �г,. ;�ears f?6i, t967, l97.'. гад l9"г3 ага аое :aelss.'ег4 bet.aua о� ;Ъд дiг'дгедс .,assi�_сас_оа ог escaolls:�eacs �у eapiopaene зi:s �вд �. :�а� гсосд¢:с сггацs ;ог ::asa ;еа:з. . /д ?�гггs со ггрег3а_с� :rirers l0 yzэ�.rs о1д аад т,ег. �е де.Е'.�1с1аа �s бееп с�ед сог 1910 �еезаsа : sгссагз! (r1o-d.31.c) �rел�сдо�п :�,s asaцabl, (�sed !а �:.b1г t.2�). �а д=__аг:аеа �ас-:геп asrer_аасгд апд �рlоуед :аг:сггs La !9+й �as ьга�:.д ' � ' , .а ггу : оиsгы# :аг:сегз . . /е ?rt1�_iaar4 а_pio;neпe iзta ;ог !975 :п зvailahlг свiу _'cr :�а _зеvас:ог_^g чес_аг arv' ;ог� _Ъоае ."_-в eaployLag гс :г3sс ,.гас7 :аг:tггэ. "а с_прiгсг-с.г .г7о :зсссr7 зна_о: саса; ,.г., сакг ._ .3ve сг аоге aorSucs tзtпег _�а : xacq or аоге; гшрlиrлеас :� :z._s г:splew•t-.3 �i•�е _я :�асееп '�rкгг5 _.. Сг'4 .as 'utdtd со _:а зvг•+=c�is ;37с .1аса. :re 19i0-+3 гтаiоу�епt 3rоьг: :аса, +.QB: vas асрl=аа :э .аа 17,i?7 vociгars ta е�е i_�е :я :гавсnес cicгgary aakiag с.';rs :ог�1 �ос !975, :Я,34Б �vrscers. . Scurcaa: ;tC5Q, :tьс3оаа2•9дтрlе of 8оивеhоlда 3u11et1n аад .laauaS Suгvey of 2аtзЬ3iвhше.а[а� нв герятtвд in P3Z.D: Iaduзtc•-1в1 5traresy and ?о11су ia t.he Phiiroiпea, ТаЫе 1.27, и.ау 1979. 1 'i � 31 Table 14: TOP TEN MAJOR MANUFACTURING INDUSTRY GROUPS IN EMPLOYMENT GENERATION, 1956-71 AND 1970-75 Net Major Industry Group Employment. Percent Generation, Distribution 1956-71 Part A All ",Hanuf acturing (000) Industry groups (5 or more workers) 220.8 100.0 Textiles 38.2 17.3 Food manufactured 29.5 13.4 TWood and cork products 22.2 10.0 Chemicals and chemical products 16.8 7.6 Nonmetallic minerals 16.2 7.3 Electrical machinery 13.5 6.1 Metal products 11.2 5.o T6bacco products 10.0 4.0 Basic metal products 9.8 4.4 Transport equipment 9.2 4.2 Part 3 Net Major Industry Group Employment Percent Generation, Distribution 1970-75 All Manufacturing Industry groups (5 or more workers) 325.8 i0010 Food 74.5 22.9 Transport Equipment 54.2 16.6 Chemicals 36.9 11.3 Printing 33.9 10.4 Nonmetallic Minerals 19.7 6.1 Textiles 19.3 5.9 Tobacco 15.9 4.9 Rubber 15.9 4.9 Basic Metals 15.6 4.8 Metal Products 15.0 4.6 Source: Table A - 32 - TabLe 15: C!ANGES IN EMPLOYMENT STRUCTURU 5Y SZ OF r72, 1957-74 Erimlovmenc in fir,ns rth Total Less 200 and Total employment than 5 5-19 20-99 100-199' more Year employmenc (%) workers workers workers workers workers 1957 1,005 100.0 77.8 5.1 6.2 11.0 1958 927 100.0 75.4 5.4 6.1 13.1 1960 1,036 100.0 76.0 4.8 5.3 2.9 11.1 1962 1,052 100.0 73.5 4.6 5.8 3.0 13.0 1968 1,234 100.0 68.0 5.6 5.6 3.1 17.7 1970 1,398 100.0 71.1 5.2 4.4 2.7 16.8 1971 1,439 100.0 70.7 4.7 4.0 2.8 17.9 1974 1,423 100.0 62.6 5.5 5.8 3.8 22.3 1976 1,680 100.0 62.4 4.8 ---- 32.7 - Sources: NCSO, Annual Survey of Establishments; Table ; unpublshed data. l 34 from Table 12 it is apparent that this is not the case for the Phili The expansion in employment in sari-sari stores (which are usually identified as part of the informal sector) was the lowest In all the service sub-sectors, whilst that, in hawking and peddling ( the archety7a! "informal" sector activity in many people's minds) actually fell during the 1964 73 period. Tables 13-16 show the changing pattern in manufacturing labor absorption by various indices. Table 13 shows the changing distribution of manufacturing em- ployment by the unorganised household (including cottage industry) and organised factory sector between 1956 and 1976. This shows that the share of unorganised sector manufacturing in total industrial Pamployment declined (from 79 to 63%), largely because employment growth in the factory sector was much more rapid than in the unorganised sector. Table 14, shows the ten major manufacturing industry groups in employment generation between 1956-71 and 1970-75. Whilst wood and cork products and elec- trical machinery were in the top ten in 1956-71, they were replaced by printing and rubber in 1970-75. Food manufacturing in both periods was amongst the top ten industries for labor aeneration. Table 15 shows that the growth of employment in large firms (with over 200 workers) has been greater than that of the small scale firms in manufactuting. Finally, Table 16 shows that, taking the average capital labor ratio in manufacturing as the benchmark in the tw-o periods 1960-1970 and 1970-74, the annual growth of employment and real value added was higher in both periods in industries which had capital-labor ratios above the 1974 all manufacturing average, than those with below average capital-labor ratios. - 35 - /a Table 17: MANUFACTURING SECTOR INDICES (Base 1956 = 100) Output/Capital Output/Labour Capital/Labour Hicks/ Hicks/ Hicks/ Year McNicoll McNicoll / McNicoll (1) (2) (3) (4) (5) (6) 1956 100.0 100.0 100.0 100.0 100.0 100.0 1957 108.3 104.9 102.9 100.8 94.9 102.2 1958 111.1 109.8 117.1 120.5 106.2 114.6 1959 114.8 116.3 124.8 120.5 109.3 116.3 1960 105.6 113.8 129.5 117.9 121.7 125.4 1961 104.6 - 130.5 113.8 124.7 - 1962 108.3 102.4 132.4 124.7 121.7 154.3 1963 110.2 99.2 140.0 110.9 127.8 185.2 1964 103.7 91.9 135.2 122.6 130.9 200.7 1965 100.9 79.7 131.4 125.5 129.9 224.0 1966 100.0 76.4 135.2 122.9 136.1 255.6 1967 98.2 - 140.0 129.1 143.3 - 1968 99.1 83.7 143.8 136.6 146.4 272-.6 1969 87.0 153.0 278.3 1970 78.1. 153.5 351.9 1971 81.3 151.2 421.5 1972 - 173.3 - 1973 85.4 180.5 490.6 1974 119.5 196.9 492.8 1975 168.3 1976 176.4 1977 172.5 Source: Columns (1), (3), (5) - Hicks/McNicall (1971) "' (2) - Table A.7. (4) - Table A.2 (6) - Table A.7 /a The figures in these columns are not comparable for the reasons given in footnote 1, pg. 37. - 36 - These Tables offer strong support for the view that the falling (and relatively low) manufacturing employment output elasticities observed in Table 9, are due to the particular pattern of manufacturing growth which has been biased towards the organised, large scale capital intensive industries. Further support is provided for this view by Table 17, which summarizes estimates of output-labor, output-capital, and capital to labor ratios for manu- facturing industries derived by Hicks-McNicolls and by us (in Table A.7).-1/ These show that the capital labor ratio has been rising over the period, as has the output to labor ratio, whilst the output-capital ratio declined till 1968, and since then has fluctuated, except for a sharp rise in 1974. Given the uncertainties of our esti- mate of the output/capital ratio (see footnote 1 below), too much should not be made of this 1974 rise in the output-capital ratio. The general message of a rising capital intensity in the manufacturing sector seems to be fairly clear from the evidence we have presented above. 1/ The two sets of series are not strictly comparable.' The Hicks-McNicoll series up till 1960 is based on constant price estimates of value added and capital stock made by Umana (1967). Their subsequent series for these variables are based on recorded increments to fixed assets using NEC's depreciation assumptions and price deflators. Whilst for value added they used disaggregated survey figures deflated by the respective wholesale price indices. By contrast our series are based on value added at market prices and the book value of fixed assets for the output-capital ratio, real value added and employment data for the output/labor ratio, and the bookvalue of fixed assets to employment for the capital labor ratio. Our indices are obviously very imperfect compared to those of Hicks-McNicoll for well-known reasons but the general trends of the ratios would seem to be fairly reliable. - 37 - We can also compute the estimated employment foregone in industry as a result of this bias towards lessening labor intensity over time.. This can be done as follows. We estimate the employment which would have been generated in industry if the industrial employment output elasticity over the whole 1956-77 period had been 1.2 the value which was the employment-output elasticity (c) in non-traditional manufacturing between 1970-77 estimated by IBRD's Industrial Strategy mission (Report No.2513-PH, Vol.1I, p. 15). The net increase in employ- ment &E over the base year (1956) employment (E) is given by 6E - AE x E = c.AY.E where AY/Y is the percentage change in real industrial output observed between 1956-77 of 240%' from Table A.3).'Given the level of 1956 industrial employment of 1,217,000 this yields a value of AE of 3,505 thousand, which can be compared with the actual net employment generation over this period estimated in Table 8, as 1,376 thousand.-/ 1/ This of course assumes that the additional labor demand would not have raised wage rates, and thereby encouraged a substitution of labor by capital in industry. In practice of course there would have been some rise in industrial wages if industrial labor demand had been twice the actual one between 1956-77, and this would have tended to reduce net employment generation in industry below the above estimates. - 38 - Table 18: EMPLOYED PERSONS BY CLASS OF WORKER FOR SOME SELECTED YEARS (in per cent) Year Total SWa S-EWb UWc N 1956 100.0 29.1 42.9 27.4 0.7 1960 100.0 30.4 42.0 27.1 0.5 1964 100.0 33.7 40.3 25.8 0.2 1967 100.0 36.8 38.4 24.8 0.1 1971 100.0 34.0 41.7 24.1 0.3 1973 100.0 37.8 39.0 23.0 0.2 August 1974 100.0 38.7 37.9 22.9 0.5 August 1975 100.0 40.2 36.9 22.7 0.2 August 1976 100.0 41.2- 35.8 22.6 0.4 Source: Bureau of the Census and Statistics Survey of Households Bulletin for the dates indicated in the table. a) Wage and salary worker. b) Self-employed workers; includes employers. c) Unpaid family workers. d) Class of worker not reported. Tablelq: EPLOYED PERSONS BY MAJOR INDUSTRY GROUP, BY CLASS OF WORKER, 1957, 1968 ANI) 1973 (In thousands, except percent) 1957 1973 1976 Major Industry Group SW a SEWb UFW/c SW /. SEL uF sw Las. SEi/b upw]-L 1. All industries 2379 3501 2250 5130 5167 3133 6357 5516 3487 Percent 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 2. Agriculture, forestry hunting & fishing 27.0 68.8 84.5 19.6 68.9 87.0 20.1 68.8 86.8 3. Mining and quarrying 1l 0.1 0.1 0.9 0.2 0.1 0.8 0.1 0.0 4. Construction 8.6 0.6 0.1 8.0 0.6 0.3 7.3 0.0 * 5. Manufacturing 17,4 12.2 7.7 16.6 8.2 4.1 17.4 7.9 3.9 6. Electricity, gas, water & sanitary secvices 0.8 * 0.7 0.0 - 0.7 0.11 0.0 7. Commerce 7.3 13.6 6.4 8.6 17.3 7.5 8.7 18.4 8.3 8. Transport, storage and communications 7.9 1.3 0.2 7.9 2.0 0.1 7.1 1.7 0.2 9. Government, communication, business & recreational services 15.1 0.7 0.1 21.1 0,9 0.2 22.8 0.8 0.1 10. Domestic services 12.8 * 0.1 13.6 0.0 0.1 12.4 0.0 * 11. Personal services other than domestic 2.1 2.9 1.1 2.7 1.9 0.8 2.5 1.8 0.5 12. Industry not reported 0.3 * 0.1 0.4 0.0 0.1 0.2 0.0 0.0 /a Salary workers. Source; Bureau of the Census and Statistice Survey of lb Self employed workers; includes employers. 11ouseholdp Bulletin for the dates tidicated in Lc unpaid family workers. the table (and Tidalgo (1976) for 1957 und 1973, * Less th4n 0.1 percent. - 40 - d. The gualitr of Emnloyment So far we have been concerned with presenting trends in the levels and structure of employment, without worrying too much about the "quality" of the employment that has been generated (e=cept ina or estimates of "total" unemployment in Table 1). By the "quality" of employment, we mean to signify various aspects of developing country labor markets which are categorised by terms like "underemployment", visible or invisible, and fears that much self- employment and unpaid family employment does not represent true employmentor "jobs" , as these types of activit7 are-considered to be the recaptables of the "underemployed" poor unable to find proper "modern" sector jobs. The three indices we shall use to judge trends in this "quality of employment", are; (i) changes in average hours worked over the years, (ii) changes in the numbers (or percentage) of those employed who want additional work and (iii) changes in the distribution of employment by broad class of worker (salary and. wage earners, self-employed and unpaid family workers). Ca) Cbanginz D%atriLution of -1ovment Rv Lahor T-re Table 18, s rises the data on the distribution of employed persons by class of workr. It shows a marked shift between 1956 and 1976, towards wage and salary earners, and away from both self-employment and unpaid family labor. Table 19, shows the changing shares of these three class of workers between 1957 and 1976, in the different industrial sectors. This shows that, the majority of unpaid family workers are to be found in agriculture, followed by commerce and manufacturing, but whereas about a constant 86-87 percentage of all these workers are in agriculture, manufacturing's share of these workers has declined over the years (from 7.7% in 1957 to 3.9% in 1976) whilst that of commerce has slightly increased (from 6 to 8 percent). The same trends are also - 41 PER=C DISTRIUTION OF 7FPLOYED PERSONS aY CLA.S5 G 70 R, 3=, ~2: -.2: . ZDi 2BII2ZTS 1965-1976 (Ecusehold. data) Wage and Sel Unoaid Not Wae and Self Unpaid Not onth and Year Salam Emplyed F=iy Reported Salar Eoyed Familv Reorted Workers Workers Workers. Workers Workers Workers Yay 1965 23.6 46.6 29.7 0.1. 33.8 46.7T 19.4 0.1 may 1966 22,9 42.4 34.2 0.5 34.9 42.5 22.5 0.2. may 1967 25.5 41.6 32.8 0.1 . 35.7 42.8 21.4 0.1 !ay 1968 22.9 41.9 35.1 0.1 34.6 43.0 22.3 0.1 May 1969 23.0 45.1 31.7 0,2. 33.9 45.3 20.6 0.2 bL 1970 28.3 45.3 25.9. 0.4 40.3. 44.0 15.5 0.3 Aug 1971 28.9 40.8 25.2. 0.1 39.7 45-.0 15.1 0.1 Aug 1972 23.9 47.2. 28.7 0.2 35.0 46.3 18.1 0.1 Aug 1973- - 24.& 43.7 31.4. 0.1 35.9 44.2 19.8 0.1 Aug 1974 25.7 44.1 29·.7 0.5 . 36.1 45.0- 18.5 0.4 - Aug 1975 27.1 43.1. 29.7 0.2 37.3 43.7 18.8 0.2 Aug 1976 28.6 . 41.6 29.3. 0.5 39.2 42.1 18.3 0.4 Urban Female -Uay 1965 63.0 27.0 10.0 - 37.2 28.9 32.3 - May 1966 63.4 25.9 10.1 0.4 33.5 27.3 35.9 1.1 May 1967 63.5 25.0 11.2 0.3 37.1 25.9 34.5 0.2 May 1968- 62.1 26.0 11.5 0.2: 33.7 27.1 39..0 0.2 .ay 1969 63.T 26.2 9.9L 0.2. 36.8. 27.3 35.7 0.2 May 1970 70.0 23.3 6..4. 0.3 44..1 25.6 29.5 0.7 Aug 1971 67.6 25.6 6.6 0.2. 43.0 28.3 28.5 0.1 Aug 1972 66.7 25.6 7.5 0.2 39.8 28.2 31.9 0.2 Aug 1973 69.2 23.9 6.7 0.2 - 42.3 25.0 32.5 0.3 Aug 1974 67.8 24.1 T.3' 0.3 . 44.2 22.9 32.3 0.6 Aug 1975 69.9 23.0 6.8 0.3 45.9 23.6 30.2 0.3 Aug 1976 69.2 22.8 7.6 0.4- 44.8 23.9 30.6 0.6 Philin,cinesT May 1965 34.9 41.0 24.. 0 .1 2iay 1966 34.4 37.7 27.4. 0.5 May 1967 36.2 37.0 26.7 0.1 May 1968 34.3 37.3 28.2. 0.1 ay 1969 34.& 39.6 25.4 0.2 liay 1970 41.5 38.3 19.7 0.4 Aug 1971 40.8 39.6 19.5 0.1 Aug 1972 36.6 40.8 22.5 0.2 Aug 1973 38.0 37.3 24.0 0.! Aug 1974 38.7 37.9 22.9 0.4 Aug 1975 40.2 36.9 22.7 0.2. Aug 1976 41.2 35.8 22.6 0.4 Source: NCSO Survey of RousEholds and 1970 Population Census - 42 - true of self-employed workers, who have been and continue to be mainly in agriculture, but a fair percentage continues to be found in both comerce and manufacturing, though over time their share in commerce seems to have been increasing over that in manufacturing. The other (mainly service) sectors (which have traditionally been identified as the reservoirs of dead-end low quality employment), surprisingly contain miniscule and declining proportions of these workers. Thus, in 1957 only 5.4% of the self-employed were outisde agriculture, commerce and manufacturing, whilst only 1.4% of unpaid family workers were outside these industries. By 1976 these percentages had .dropped to 4.9% of self-employed and 1% of unpaid family workers. Table 20 shows the changing distribution of these three classes mi worker by rural-urban sectors and by sex. This shows as is to be expected that, the proportion of wage and salary earners is highest in urban than in rural areas, but it has been rising in both. The share of self-employed workers show some mild signs of decline in both rural and urban areas, but that of unpaid family workers is relatively constant (at about 30%) in rural areas, but has been declining in urban areas. Rather surprisingly the share of wage and salary workers is now higher amongst females than males, and has risen since 1965, whilst that of males has remained between 35-40%. The share of the self-emplodyed is higher amongst males than females, with no clear trend for the former but a decline for the latter. There is a much higher proportion of unpaid family workers amongst females than males, with nc clear change in trend for either sex. - 43 - Table -21: AVERAGE HOURS WORKED BY EMPLOYED PERSONS AT WORK, 1959-76 Broad Industr7 GrouDing All Year Industries A I S 1959 41.2 39.7 43.8 44.5 1960 41.6 39.9 44.8 46.0 1961 42.4 40.4 45.6 47.8 1962 42.1 . 40.7 45.5 44.2 1963 42.3 41.1 45.7 41.9 1964 43.3 41.8 46.4, 45.1 1965 44.5 43.4 56.1 44.9 1966 45.0 43.5 48.0 44.8 1967 44.4 42.7 48.2 45.2 1968 44.1 42.5 48.0 45.1 1971 45.8 43.3 47.6 47.3 1972 44.9 42.7 46.9 39.6 1973 44.7 42.6 46.5 45.6 1974 (August) 45.6 43.4 45.0 50.8 1975 (August) 45.2 42.3 45.5 51.1 1976 (August) 44.3 42.0 43.9 48.8 Source: Data on employed persons at work are from the Bureau of the Census and Statics Survey of Households Bulletin for the dates indicated in the table. a) Includes agriculture, forestry, fishing, and hunting. b) Includes mining and quarrying, construction, manufacturing electricity, gas, water, and sanitary services and trans-. port, storage and communication. c) Includes comerce, government, community, business and recreational services, domestic services, personal services other than domestic and industry not reported. <A) F!!.OYrD ?RS0S AT WMRK 3Y PERC=T MRG 40 EMMS OR MORE, 3Y ltUC I--U5='Y, GR0UP, 1965-1975 ?ercent wo-rkin 40 hours or- nore Occ. Mar. May. Aug. Feb. Hay. May. Aug. Nov. Feb. May. Aug. Nov. --o. Aug, Major industry Group 1965 1971 1971 1971 1972 1972 1973 1973 1973 1974 1974- 1974 1974 1975 1976 AgrLculture, Forencry, brating and ?tishing 71.5 67'.9 69.3 69.1 66.5 67.1 69.3 69.9. 67.7 65.1 67.7 71.9 71.9 70.4 69.0 Mining and Qurr7ing- 98.2 85.1. 89.6 88.4 77.4 81.7 86.2 86.6 88.3 78.2 92.9 92.6 87,7 90.0 89.8 Manu.acturIng. 63.6, 71.7 '75.7 74.1 74.9 73.9 75.7 77.3 76.9 78.2 75.8 80.0 79.4 78.7 77.6 Ele-ricity, Gda, VAcer and Sanitary Services 100.0 93.7 96.4 93.5 99.9 90.3 95.7' 98.5 99.1 95.5 97.3 99.1 100.0 96.8 99.9 Coastion 84.7 90.6 88.6 87.7 89.7 87.9 35.3 85.5 87.9 83.0 85.9 86.0 87.6 83.5 88.3 Comrce 67.9 72.6 76.1 78.7 76.4 73.8 75.4 75.1 77.0 77.7 77.2. 80.7 79.0 79.3 77.2 :ranoorz, Lcorage a com=icacon 86.5 84.5 87.1 84.6 83.0 86.2 33.4- 84.6 84.4 85.6 85.3 86.3 39.3 37.9 90.0 Govermenc, Commmiy, Businems and Recreational Service 93.0 91.5 91.9 93.4 94.9 92.3 94.9 95.6 94.0 95.0 92.7 95.1 95.4 94.6 95.1 Domastic Services 89.1 87.4 92.2 93.7 91.7 93.3 91.9 91.4. 92.8 92.4 92.2 92.4 91.4 91.5 91.3 ?ersonal. Services. ocher %.an Doestir. 71.3 74.7 79.8. 79.0 82.1 78.1 77.9 77.1 80.3 80.1 80.8 81.5 83.4. 85.8 79.5 Induscry Noc Reporned 41.4. 44.9 66.4. 45.7 - 27.0 62.4- 38.5 51.T 29.2 36.4 37.6 40.3 20.8 42.4 A.1 Induscr±es 73.4 74.3 75.9- 76.4. 74.2 73.2 75.5 75-.7 74.7 76.5 73.9 78.0 77.9 76.9 76,3 Source· oi Data: BuraAu of Cenus and Statiscics Labor -orc& Sur-vre for the dates tndicaced. (3) EPI0 D FRSoNS år W=L 3T ?Yr-=. ;a= 40 RCUMS 0M. ME BY MAJOR OCCUAION GOUP, 1965-1975 ?ercenr working 40 hours or mre Oct. Ma=.. May. Aug. Feb. May. May. Aug. Nov. Feo. May. Aug. Nov. Fö. Aug. Major Occupacion Group 1965 1971. 1971 1971 1972 1972 1973 1973 1973 1974 1974 1974. 1974 1975 1976 Profesaional, Technical and Relaced Workers 93.1 91.1 89.1 93.0 95.2 85.4 93.3 95.4. 94.2 96.0 90.3 94.6 94.0 94.6 93.5 Adminiscratc±ve-, Executive. and Managerial Workers 84.8 90.6 92.7 91.4 94.2 93.1 94.1 95.0 96.7 90.6 94.8 94.8 94.6 93.9 95.3 Clericai Worker2 93.9 94.9 94.6 97.1 97.6 97,2 97.3 97.6 95.9 96.4 97.2 97.6. 98.8 98.1 98.0 2sl2s -orker . 56.6. 70.8- 74.3 76.8- 75.1 72.2 73.1. 72.6 74..3 75.3 74.7 78.4 76.9 77.0 74.2. Farnors, larÅ i..borars, :Iskran,. Runcers. Loggers 71.4 67.7 69.7 63.9 66.2 67.1 69.1 69.T 67.5 5 67.67.5 71.9 71-7 70.2 58.8 Minr3, Quarrynan and Relared- Worker3 97.1 83.9 89.9 91.2. 68.6 72.3 77.9- 72.& 90.2 67.4. 86.7 86.6 91.3 84.9 88.7 ljorkers in 'ransporc & Co ni- cation Occupations 87.1 86.2 84.5 86.7 87.4. 87.9 85.7 87.2 87.4 88.4 87.1 88.3 91.5 89.6 91.5 CraftsaEn, Production Process Workers 65.8 74,0 77.1 75.0 75.2 75.0 75.7 76.7 77.1 77.0 75.0 79.3 78.6 77.7 78.1 Manual Workerå and Laborer-i 80.2 80.4 82.9 83.4 76.8 83.3 81.2 80.3 78..8 80.9 34.2 82.3 86.8 83.3 87.6 Servica, Aport3 and Rålaced Workers 86.0 85.7 89.4 89.9 90.0 90.0 90.2 89.5 90.2 89.9 90.1 91.0 92.6 90.3 90.5 cc-upacion Not Repotred 35.6 36.4 63.9 - 53.4 - 57.5 41.7 43.0 28.3 34.4 30.7 33.3 16.3 32.2 All Qccumations 73.4 74.3 75.9 76.4 74.2 73.2 75.5 75.7 74.7 76.5 73.9 78.0 77.9 76.9 76.3 Source of DaCa; Bureau of Canaus and Scacstics Labor Force Surveys for the dates Lndicaced. • r '. ь , I , 1 r 1 . 1 •гаьlе гз: Lг+рl.nrl:u 1'eusoыs лт ноик 1и рСктсиinlив ени иои-есиУсиt.1vилi, nluus•ru1PS �и nsslue Fou лииlтТон�1. Чг1ик � цц ыигиlин оР uouus юаь i�n дииlис т!�>: suuv�Y ЧкеК ¢ни &>;и, oc�innнu 1445 еиn Аисиsт 1975� 1976 � _ . _�_ � , ___. � _..�� _ Тосд1_ __ AgrlculC�ьco tlmn-��, e1culFuenl induakrles_ _� Perceuk Nnnting Percent Uanting l'grceь,t 4.antlпg 1lииrд ЧиУkед 1hьгlпц [:ье Nm�d,er 1п 1Ъоивыtдr А.1д�[iоььад Work Nuuil,e� 1п Тjьоиаипдr Addltlonal Nork ииьиi,еТ iь; TЬourrnda � АJ�11Кьоnвl Uoьk Survcy Чееk anJ Snx 19b5 1975 1'37б 1945 �975 1976 1965 19)� 1976 1965 j�75 �974 1945 ��7� l9]§ 19G5 �9�5 1'l/G ьо�ь st�an 9.в►з 14,зйn 15,оыs 25.й tз.4 1о.а s,sьз 7l5�7 7,чй2 а4__,;,_s 1э.з �2 а,25� 4,553 7,1Ч� 2ь.s 1а о►n.й ипдег йо llоите 2,5л1 3,Э5ы �,554 38.5 25.9 2Э.з 1,5ыо ?1�86 2,й52 35.1 21.3 19.1 1,и1а 97а �,1ой 4Э.ы 37 1 з2.► - йо ыоиrд апд ovzr 7,21з 1о,э77 t1,51o 2л_ь ч_� 7.о Э,9"/7 5,19ы 5,йы4 Уо.2 4.4 7.7 ],234 5,57Я 4,оа4 l1.2 n 9 ь.з , а е ь,ьи1 rэ,зsз ч,77ы s�.ь за,ы 1а.1 4,366 s,?зs Б,оЧZ 25.3 tз.s ta.o г,2з►, 3,atB s,73$ э2: и 77 о l2.3 �� - . --- - ь under й4 1lоагл 1,а3ы ],72й 1,671 й7.5 ЭО.О 30.9 893 1!'�92 l,2ыЧ й2.5 25,Э 26.9 Эй5 332 Зд9 ЬО.й 4Ч 7 63.ц йо lwura �пд о��г 5,354 7,427 8,nыы �2.� 11.з е.э э,Чь7 р,5й1 а,75о ао.е 9.е а.о 1,аыs з,оыь з,ззв 2ь.s 1з s ы_ь �ьд1е з,21з 4,7ы6 s,3o� 2о�ы 1.з ы�й �,1у7 �l652 1,чои z1,�4 1z.7 ь.s 2,о1ь э,1:tй з,йоа 2u.s 1n ь ц_з unJar 4о flоигв 1,35й 1,434 1,87Ч зо.1 21.4 14,� 6N6 995 1,163 25,6 15,� 1о.4 Ьб7 o4Q 7�4 35.а Эи 5`1ь,ь 4Q Huure ипд Ovei' 1,ц57 Э,150 3,4аа 14.и 6.U 3_9 514 b57 734 1б.� 8.1 5.5 1,Э47 �,49Э 2,б$В 13.2 5.S 'f.5 � i - - --,� _ 5оигсе. Ca,ptillo, ор. cLt., апд 1К:Sо - T.uLoc Yorcc Suroeyu, varloun даСед, , i r 1 . � ь � . � ь , � ь ' i � - � 1 у � 1 � i .i � . S- ri.sing, therelore, by the index. of change in the class of workers, there does not, seem to be any sign. of any deterioration-in the "quality" of employment over time i= the Philippiz e '_ (b) Changes in Average- 11ours Worked Table 21 sx-4rises- the average. hours worked. by broad sectors (ag-ricul.- curejindust=7 and services) since 11059. There appears to, have been a md I d increase in average hours worked in agriculture and services, but no clear trend in indust=7. Table 22 su-n ist--s the data an, employed persons working 40 hours or more by major industry and occupational group. It shows that whilst agriculture has the lowest proportion of any industry it is st '! as high as 70%. All the other sectors "mr-luding services have 80 to 90 percent of thei-- wrlkezs working 40 hours or -more. Cc) ChanZ I e I a. -in the Nu=hera of Emp 1 oZ 2d VAn t ia g A dd i tional ',?ork Table 23 shows the percentage of both those who worked under 40 hours and 40 hcurs a=d --ore who want' additional- work between 1965- and 1976, by se= and agriculture, non-agricultural industries (also see Table A.9). For both sexes, and for both workers in agriculture and non-agricultural industries, as wall as for both those working under or over 40 hours, the-pe:rcentage want ng additional work has been steadilv falling over the years. The percentage of males,irrespective of hours worked, who wantadditional work is unsurpri'singly higher than, for fremales (about 31Z for malles who worked under 40 hours in 1976), whilst surprisingly more of those worgng under 40 hours in non-agricultural industries (33% in 1976) want additional. work than their "cousins" in agricultural industries. 기 Table 25: AGRICULTUUL REAL WAGES (1965 PESOS) BY REGION Cagayan Central Sotithern Western Eastern N. & E. S. & W. Year I10c0s Valley Luzon Tagalog Bicol Visayas Visayas ýtindanao MindanLio 1957 3.82 3.85 4.30 11.58 3.38 3.09 2.90 4.01 3.90 1958 3.63 3.78 3.98 4.89 3.15 2.99 2.90 3.48 3.79 196,9 3.82 3.85 4.12 4.35 3.22 2.89 3.06 4.06 4.17 1960 3.42 3.63 3.82 4.34 2.96 3.17 2.98 3.62 3.83 1961 3.29 3.43 3.45 3.96 3.05 2.94 2.86 3.47 3.72 1962 3.411 3.47 3.59 4.11 3.22 3.06 2.87 3.50 3.48 4- 1963 2.94 3.26 3.16 3.46 3.02 2.89 2.74 3.07 3.11 1964 2.82 2.99 2.84 3.45 2.78 2.68 2.52 2.98 3.01 1965 3.47 2.85 3.59 4.15 2.44 2.31 2.89 2.98 3.42 1966 3.55 2.98 3,24 4.70 2.46 2.39 2.63 3.17 3.69 1-967 3.53 2.66 2.6& 4.95 2.59 2.32 2.1,2 3.44 3.51 1968 2.87 2.90 3.17 4.10 2.18 2.07 2.34 3.07 2.73 1969 2.76 3.29 3.36 3.79 2.32 2.08 2.26 3.19 2.84 1970 3.00 2.85 3.09 3.65 2.45 2.53 2.22 3.52 3.22 1971 2.62 2.30 2.65 3.24 2.32 2.30 1.84 2.77 2.47 1974 2.27 1.57 2.31 2.41 2.02 2.03 1.93 2.16 2.15 Source: Derived from Table A.11. -49 - 5. Wase Trends Tables 2-28, su=-arize the available data on real wage trends from the 1950s till 1977, for various industry and occupational groups in the Philippines, and by regions for agriculture. The noted to the Table explain the different sources, and the coverage and meaning of the various series. The major conclusion that can be drawn from these Tables, which tend to corraborate each otheris a rough three period classification of the real wage history of the economy which corresponds to the differing sub periods distinguished by trade regime in Section I, namely (i) 1956-60/61, (ii) 1961-68/9, (iii) 1968-1976/8. Chart 1, charts our BAECON real rural wage and Central Bank real wages for workers in Manila series. First, from the data on real agricultural wage trends (Table 24), it appears that during the first sub period, there was no clear trend in the real agricultural wage rate. During the next sub period, despite fluctuations there is some decline in the rural real wage. In the third period till 1974 there is a much steeper decline in real rural wages, which then rise sharply to their mid 60's level in.1976-77. Table 25 provides our estimates of unweighted average real wages by region between 1957 and 1965. This tends (not surprisingly) to confirm the same story, though the regional turning points differ slightly amongst the regions. Table 26 summarizes the real wage trends for skilled and unskilled workers in Manila from 1956. Table 27, those by industry from the NCSO, Labor Force Surveys from 1969-76 and Table 28 for selected occupations in different industries for 1973 and 1976 from the WPCO surveys.* All thred broadly tend to corroborate the following trends (as summarized by the Central Bank series - 50 - I MANILA AND SUBURS: 1956-1978 (Establishment- Data) (1972. - 100) Skilled a) a) Cam= b) ) Salaried Iag Laborers Labborers Laorers Larhmn Foreman Emloyees Earners (1972. Pesos) (1972 Pesos) (1972 Pesos) 1954 140.1 . 113.4 11.81 19.39 23.10 118.1 109.5 1955 141.5 117.8 12.27 19.3& 23.84. 123.5 113.8 i956 138;l 116.6 12.15 18.64 23.90 121.7 112.3 1957 135.7 113.4- 11.28 16.80 23.89 L22.z 114.2 1958 135.6 110.3 11.49 18.13 23.67 124.6 111.. 1959 9.39,5 112.2 11.69 18.34 24.48 131.5 117.3 1960 133.4 107.9- U1.23 17.53 23.89 133.5 119.3 1961 131.2 109.8 11.34- 16.02 24.21 134.4. 117.8 1962 125.5 105.9 11.03 14.89 23.05 131.0 113.0 1963 122.3 105.6 11.01 14.47 22'.5 1 128.2 108.1 1964 115.1 98.6 10.28 13.54. 21.37 121.0. 104.3 1965 115.2~ 102.7 10.7 1 13.43 22.13 119.3 107.8 1966- 114.9 104.8- 10.91 13.49 21.84 119.0 112.8 1967 113.1. 103.2 10.75 13.86 20.90 113.& 112.3 1968 119.4 112.1 11.68 13.89 21.89 116.8 110.3 -1969 123.3 115.2. 11.99- 13.92 22.79 119.9 112.7 1970 114.4 111.6 . 11.63, 12.65 20.91 109.7 105.9 1971 105.1 104.1 10.85 11.98 19.29 103.0 99.9 1972. 1OG.0. 100.0 10.42 11.26 18.34 100.0 100.0 1973 92.4 90.0 9.38 10.92 17.25 96.6 89.4 1974 75.6 72.8 7.58 9..29- 14.61. 79.5 73.5 1975 72.7 72.9 7.60 8.82 14.34 . 82.4 76.1 1976 71.2 72.3 7.53 8.81 14.38 86.T 82.3 1977 72.9 70.4 7.34. 8.47 14.01 1978 76.1 68.4 Noca: a) Raa! wage-rate index kas been obcained by deflacing =oney wage-rata inde= by the. constmer price index (1972-100) in Mai1a. b) Eaa. wages of thrse classes. of laborer- are derived by deflating the. data in Table A.12 by the. Y.=1a, consuer price index Sourca: Central Bank of the Pbilippines and Table A.12 I - *1~~~~ - - -.--- -.------+I - Iri c 6t I ~161 I .61 /1 I 9961 Å II OL6t I 961 I 961 tÉ 'I 1 I 0961 '/; I i61 -~ I 061 - I AV5MtACIH WMY j EAL- E1ill 9ULJ2iLMu~ltHA (lll@J~~LLM .EMl ll JILThINj AHI <'>VYM1EUha ]|EIMMAI-EY LIOtL 1D0 TRY CR(IXIFS TJgILIVVIMEs; 1969-127-6 liouhldd Da) ArI Culturo. frlur, H..4,af4ccirlBlg ahIua. COM..c:Pt 1 A,l u i JLOL~en a t 1 fihn Pkl c pgilo (gcld Osthcer.) Frvatd Civt. All privata Gov£. 4.11 IiyaCe covt. All KrIvfis Coyt. All VrIvata Covt. Alk trOVq Gv. All PKI',äte Ci.I All Hy 1969 - - 28 - - 0 - - La- - k - - 1 - AugLut 1971 29 1] § 53 / 49 5) I-a 58 104 1l 5 1 1 1 / 12 4si / t AuBuät 1972 26 JJ 26 54 11 §H 47 pi 50 R l i 1 4L 49 Auguat 1973 25 57 2 49 61 A -40 44 i ;2 1g u 45 82 1 0 1/ 1 31 12 4 Auk&udt 1974 22 48 22 40 10 a 444 § 4 56 10 / j 32 61 3 AuBuac 1925 22 51. 2 42 67 L2 40 40 0 49 130 3j 0 53 0 / IQ 36 I9 Augus 1976 24 44 5 41 60 42 49 11i 58 3 äl 3/ 3,1 1 H-Lot; 1 Lost cha1 9,500 parsonä in t,1 group 2/ Hot rälfortd tn it iaö houaeold. Saurco: hanay Earninga häa froim 1CSO La Tablm A.13 dcflatod by $he Ak1 li ppine rtce $inr 'p Tåabl! 4.14 - 53- -' al W¾il3 Eanne By Industry (NCSO Data; 1969-1976) + - - - - - - - - --- - - - --- --- ---- --- - ---- 62 -38i 33. 8ZS C -. .- C c-(Fivata) 49.-286 Constrc ox 42.738! 29..643! - utr 23..0951 i6.548! Domestic Serv±ce 10-.000 +-+- +------------ ----- - ---- ------ 969 1970 1971. 1972 1973 1974 1975 1976 -54- for d4ferent classes oz skilled and unskilled labor - see Cha-r II). Real urban skilled and unskilled wages were roughly consCan CL7 about 1960. They fell substantially between 1960 and 1964, then stagnated with a possibly mild rise towards the end of the 1964-69 period. From 1969 to 1974 there was a precipitious fall in real wages, which have since then stagnated at roughly their- 1974- levels. There has, moreover, been a narrowing of the urban sklled-unskilled wage differential over the years, and that between urban and rural wages since 1969. Similar trends are shown for the 1969-1976 period by the real average weekly earnings data by industry in Table 27 and charted in Cart III. The lowest earnings have been in domestic services. The relative rankings of the industries by weekly earnings has remained fairly constant. except for the period 1972-73, when real earnings in transport storage etc., fell below those in manufacturing. Betweeen 1969 and 197Z the manufacturng earning differential relative to all the other industries improved, but worsened markedly between 1972 and 1974, since when it has remained relatively constant. Finally Iable 28 provides some data f=on the TACO su ys on changes in real wages of. various occupations by industry group between 1973 and 1976. This shows that between the two periods the real wages in all the occupations (averaged across industry class) fell except for physicians and carpenters. The latter probably reflects the increased emigratfon of skilled Fillipino workers after the oil crisis to Middle Eastern countries, 1/ and the effects of the ensuing (short runreduction in their supply. I/ This is also probably the explanation for the real wage rise of clerks in general businesses, contracting, import/export public utilities. Table 28; AVERAGE RL VEIMLY gAIWINGS OL' QV.LCTED OC0LTIONS 11Y IN)USTkY IN MLTVO MAtilA&. 197/3 ND J. 97 (Lia1aigIunen1 data) 7 (ln 1972 peuois for 40 itour work wee4) Clark f Div. Clief L~þre Carrjnter FJeld Cook TI Plinip, Drivec -Adini-r lec -Phyal C1.aj tra tion ______ _____ c ian______ ______ 1973 1976 1973 1976 1973 1976 . 1973 1976 1973 1976 1973 1976 1973 1976 19731 71 Agriculture and foreatry 65 59 356 295 43 41 -45 49 47 4o 36 182 130 5. 51 Financial institutions 147 98 320 309 - - · 108 92 5 140 - 173 201 . L 02 General buainesa 77 ßl 561 514 7 Ø f4 104 104 109 2Q - 254 243 102 0. General contractoru 54 58 365 327 3.9 40 45 5-p 5Q 56 - Ø9 194 ý14 54 50 liport/Export 76 76 332 293 N4 55 5' 71 V05 - 11 126 OL i Manufacturing 82 74 317 334 55 51 69 60 80 134 09 74 165 221 72 611 Printing & publililng 64 66 165 147 46 50 50 42 60 - - - 102 57 62 Private hospital 53 50 91 134 46 43 ý7 55 63 - 60 57 109 185 6L 4 Private Schoolm 50 51 70 154 49 49 §1 55 63 #1 56 57 99 108 56 66 Public utilitie 79 109 - , 103 101 151 129 135 152 - 91 L3) transport & coununicationa 69 61 354 154 47 42 49 56 96 157 109 73 201, 213 82 52 All othero 911 87 172 249 - 86 - - - - - - - 75 ?0 Metro Manlla 89 72 338 320 52 48 51 58 77 70 80 75 80 193 -5 1,6 Source: WAPLO niitey earnInga data glyen In Table #-15, defiated by Lte 114Ø4a confuuMer price indCe (Tabe 141 . - 56 - Rather surzrising17 ccon laborers in general business, iport/epor pr-inring and puolising and private schoois coo seemed co have had highar real wages in 1976 as compared with 1973, at a time when laborers as a whole and most other occupations were suffering_real income cuts. Amongst the managers, it is interesting to note that those in manufacturing and all other industries saw their real earnings rise. Thus the wage series for the Philippines despite their well-known imperfections (see the notes to Tables 25-28), all tend to corroborate real wage declines in the 1961-64 period, and a more substantial decline between 1969 and 1974. This would be an important though paradoxical stylized fact about the. past two decades of an economy wi±ch from the evidence in our other sections seems to have been fairly successful in generating demand for labor in line (if not a little in excess) of rising labor supply. To be:. certain that this is a stylized fact, and not merely a statistical abberation we need to use other pieces of information to cross-check the trends revealed by the above real wage series. 6. Trends in Real Per CaDita Consumvtion We would expect (assuming a larger part of wage income is consumed rather than saved) that there would be at least soma correspondence between real wage and real (per capita) consumrtion trends. A similar correspondence between real wage and real (per capita) income trends is not necessary, as it is possible for real =on-wage incomes to rise absolutely compared with real wage income, and depending upon the relative (and changing) shares of the two types of incQme, a rising constant or declining, per capita income trend could co-exist with a decline in real wages. 州 38 Tajole 29: MEALL PER CAPITA CONISIRMI'ON AND I ATL "RAGE 1957-1975 (At constant 1972 Prices) 1957 1961 1965 1971 1975 A. E=enditurss 1. -I:rom, National Accounts 8-1-9 879 954 1,016 1,086 2. From FIES 544 761 849 840 637 B. Z Change in E=enditurs 1. National Accounts 4,77' 8.53 6.50 2. FIES - All PhiliD-oir es 39.9 1.1.6 -1. i -24.2 C. % Change in Real Tages 1. Central. Bank Uask:Uled Labor -4.0 -5.6 1.4 -30.0 2. Central Bank SIcil-led Labor -3.3 -12.2 -8.8 -30.8 3. Central Bank Wage Earner 3.1 -8.5 -7.3 -23.8 4. Central Bank Salarted Employees .10.0 -11.2 -13.7 -L9.9 /a. 5. BAECON Real Wages -10.6 -7.2 -ZO.4 -57.8 Source: Tables A-17, A-18 and Tables 26 and 24. /a Except for 1971-75 change which is from the NCSO series as 1-975 BAECON data was unavailable. - 59 - In Chart Iy we graph real per capita. income and personal c-s=nption as given by the Yat±onal Accounts. Excent for a Small fall in 1969-70 in personal per capita consumption, and in 1959 and 1970 in per capita national income, both series show rising per capita incomes and personal consumption since 1954, The resulting real per capita consumption trends would seem to be at variance with the real wage decline adduced in the last section. In Table 29, we compare the evidence on trends in real per capita income and consumption from the -National Accounts and the family income and expenditure surveys CFIES) for 1957, 1961, 1965, 1971 and 1975. The reasons for the differences between the national income and FIES, income and Personal consumption (expenditure) data are dealt with in greater detail by Anand (1979). Eis conclusion is that whereas the =IES income data is highly suspect because- of numerous reporting and recall biases, the FIS expenditur data'is more reliable than the National Accounts data. This is because the FIES expenditure data is based on a fairly large sample where the period of recall (ependiture during the survey week) is shorter and also less likely to be misrepresented. By contrast the national account personal consumption figures are based. on, In effect,using fixed base period elasticities of consumption to employment, which ensure that personal consumption will rise in the National Accounts data b7 definition with rises in employment. Therefore it is the trends in per capita ependiture changes as revealed by the FIES which need to be compared with the trends in real wages. Comparing Row B.2 and Rows C, in Table 29, there does appear to be evidence of a declining trend in changes in per capita consumption as given by the FIES, as well as in the 3 ieal wage series reported. The FIES, at least, therefore would not seem to controvert the reality of the real wage trends we have outlined above. Table 30 Svidenea on c= =ends '7 Cu , 195 :D -97 !3- 2a': and Selac52d -;25 Serias uh ources Curcenc i965 Peýrcent Increase !.i; c5-1. - Ptices Prices Income Consu ion ~oocion4l Crouos 1. Agriculturl. Lahbor (;), Zail-y wag (Table 24, I.L.O.) -12.2 ( ÅxAnu~al incone, .ailles whose Hcusehold head i agricultural laborer 1283 2248 1.593 24,2 11.3 2.;=ufaczur:ng Labor (1) ýanufacturing Wage --År-ers, 7b Yonchly Earnings a 1.7 (:i) 4Inual Zncc=e, Ya11±as whose ýousehold head is crafz3mn, factory Oeare 203615 2562 1.3 11.7 acor peaiv,etc. 2520 3. Transport Worker (1) Wage Sarners, Monthly Zarnings -12.0 (ij) rnual Incoma, Familées whose Household head is cransport wo261 4271 3027 7.6 2.7 (j~ e~e ar~a~ ~oirh1. &.-10.8 (Ii) Anua Inoe,'-miiswo 4859 3444 0 10.1. Household head is sal"s workar 3443 .Mhita CoLlar (L) Salaries .=loyees, Month1 Ezrninsa -10.9 (ii) knnual. ncome, -a-dl!ca hose Househo1d head is: a) profe2sonal, cachnLcal etc. 8507 6082 6931 -28.5 -18.7 b) ad=inistra'tv, a:uie10020 7101 ' -39,2 "5.0 and anageenc 11682 c) elerical 4694 7109 5038 7.3 20.2 All thrae - all familles 7251 8372 5933 -18.2 All chiee - wet?hted 6769 8176 5794 -14.4 by seleccivc numbers o£ wage vorkcrs ir cha 1971 3C5 Labor Force SurCy0 &) Data fro Table A.12(b). b) The racios of wage earers/tocal employed was 932, 47.5 and 98.1 for group (a), (b) and (c) respectively. Absolue numbers in Zay 1971 were 547, 77 and 455 thousands. Here che percencages are applied to the 1965 and 1970/71 totals of Che respective -IZ.. Source: Barry (1976), Table 13. -61- - Furternore, 3erry (1973) has used the c"saggregation by occuratton of hotsehold head of the FIES data for 1965 to 1970/71, to mak, rough comparisons of changes in income and exenditure as given by 1/ occupation in the FIS and the various wage series. Table 30 reproduces his comrutat±ons from the FIES and the wage data assembled in Tables A-4 and A-12. As Berry concludes, though the two types of data would not be expected to show identical trends since: (=a) FIS data are annual, the wage series monthly (or in agriculture, daily) earnings; (b) FIES data are family income, wage series refer to individual workers; (c) Wage series exclude fringe -benefits; FIES earnings reflect all income (in principle at least); and (d) Wage series are based on a sample of 787 corporations (as of 1973); these would tend to be of above average size; FIS reflects all earners." (Berry (2.976)). Nevertheless there is a broad agreement between FIBS annual family income trends between 1965 and 1971 and independent occupational wage series and also on the substantial decline in the earnings differential between salaried and wage earners in the late 1960s. 1/ A similar exercise is not possible for earlier 7ears because a breakdown by occupation is not available. Nor were we able to obtain this breakdown for the 1975 FIES, as due to a programidpg error all the occunational information is this" comparson ony eas e for 1965-1970. - 62 - Table 31: FACTOR SARES 1971-78 Enterprise GOv't. Property Compensation & Property Income and Year of Employees Income Corporate Income 1971 41.1 54.8 4.1 1972 40.6 55.2 4.1 1973 38.4 54.3 7.3 1974 37.6 56.0 6.4 1975 39.4 54.3 6.3 1976 44.8 48.6 .6.6 1977 45.9 - 47.2. 6.9 1978 46.5 47.1 6.3 Source: National Income Account Staff, NEDA Table A. - 63 - Table 32: EVIDENCE ON TEE WAGE SEARE T MANFAC1TRTNG (1) (2) (3) AlReporting Large a SmallI b Estabsistbents Establishments Establishments 1956 32.2 30.3 51.8 30.9 29.6 44.0 27.9 26.6 41.3 27.5 26.2 41.6 1960 26.7 25.9 36.9 24.9 24.1 41.9 22.7 22.0 38.0 24.0 23.5 32.7 1965 26.6 26.2 33.7 27.0 26.5 34.5 24.0 23.2 36.5 23.6 23.0 35.7 1970 20.4. 19.7 34.3 1971 21.7 21.2 32.2 1973 19.0 18.0 . na 1974 15.0 14.8 na a) Establishments with 20 workers or more. b) Average -otal employment of establishment with 5-19 workers. Source, Methodology: - Cols. (1) Table A-7, Columns (2). -, C3) till 1971 are from Romana, (1975), Table III-A, III-B and III-C. It comes originally from BCS, kanual Survey of Manufacturers. A small labor cost category, "extra benefits" was excluded. From 1972 onwards the shares have been computed on the same basis. - 64 - Thus we conclude that the real wage trends charted in the previous important stylized facts of- the Philippine economy. Furthermore, as we have argued in previous sections that as employment growth Cthough it could have been higher) was by no means inadequate relative to increases in labor supply, some e=planation is required for these real wage trends, a task. we will atzempt in Chapter 3. It may, however, be noted at this stage that, given a declining real wage, and a rising output to labor ratio (see Table-1j), the wage share in national income can be deduced to have declined. The national accounts have only recently provided some data on factor shares in the economy from 1971. This is summarized in Table 31. This shows a declining wage share till 1974, but, a rising one subsequently. However, the procedures whereby compensation of employees is estimated in the national accounts, is open to question (see Anand (1979)), Sta Romana (1975)). Roughly speaking, the estimates are based on fixed benchmarks (1948 for the old series) and/or the use of fixed base level wage-employment elasticities, which again must yield a rising value to compensation of employees as employment increases, Table 32, shows the wage share in value added in Philippine manufacturing from 1956-74. This shows that the wage share in both large and small manufacturing has been declining. The declines being greatest between 1960-62, and more precipitously between 1967 and 1974, the two most acute periods of real wage decline according to our- wage series. -65- II. T-; FUNCTIONING OF 7HE =ILI2INES LAOR MIAR=ZTS The major question that we investigata in this chapter is whether Philiprines labor markets function efficiently in the sense tht there are relatively rapid price (wage) adjustments to changing sectoral/ occupational/regional excess demand and supply balances for labor differentiated by broad sector (agrLcultural, non-agricultural) and skill, occupation and region. This is a subject of some importance, in devising "amployment" policies as on one view (which may be christened "structuralist") if labor markets are characterized by rigidities, or are (as they are sometimes labelled) "segmented", then general economic policies, which expand the overall demand for labor may Thave very different effects on overall levels of employment, output and incomes, than would be the case if these rigidities were absent. As opposed to general policies which raise the overall level orfdead fIa ,specific interventions to raise the demand for particular types of labor would be required. The point is best made by considering an extreme case, (which nevertheless is representative of some people's thinking on these matters), in which we assume that (i) there are fi-ed labor-cutput co-efficients for every g 2TZiMe o - iIeaElibor output co-efficient has some distinct qualitative characteristic, which requires a particular type of laborer (viz., with some unique, industry-specific characteristics); (iii) the labor force can be categorized by these unique industry-specific characteristics; (iv) there is limited (and to make the case as stark as possible we may as well assume no) substitutability between these narrowly defined occupational grouns, on the side of both the industry specific demand and sunly of labor; Cv) Che consumption bundle of eaca induszry s laborers is noc heavily veighted towards its own product. We can also include unemplo7ment and underemployment as separate industries which produce different goods generically called "idleness", which are of course valueless. Suppose now, for some reason the demand for one particular good goes up, and assume that the other co-operative factors of production, apart from labor, required to produce the good are in relatively elastic supply, Then, as a exhytothesi the supply of the industry specific labor is given and as there is no subst±tutabilit7 between it and other types of industry specific labor,its price (wage) will be ~obid ag. This will lead to some substitution of the other factors of production for labor in that industry (thereby raising the latter's value marginal product towards the higher wage), and allowing the expansion of the industry's output. Most of the increased income gain, would have, however, been garnered_b_the speclfic factor.(labor) in the Industry whose demand had increased, and there would be little if any "trickling down" of the growth effects of the industry's expansion to the other types of labor in the economy. A general expansion in demand, would on this view not necessarily lead to any reduction in overall levels of unemployment or an increased demand for the labor of thse who are poor. For, on this view, with workers tied to particular industries (narrowly defined), it is only if the "industries" in which the "unemployed" and/or the poor are to be found,.expand relatively to other industries that these so-called "target groups" ill benefit. Specific interventions to raise demand for particular types of labor are then called for if particular "target groups" are to be helped. The alternative, equally extreme view (which we may label "competitive") is that every member of the labor force is like any other (the homogeneity assumption), and that, as a result, if the demand for labor rises anywhere in the system, this will effectively - 67 - mean a rise in the de-ana tor a " Laborers (who given c=eir snort run supply) will obviously gain equally through a rise t' the price they can command, namely their wage. There is no need for any specific intervention (on e=loyment grounds) for raising the demand for labor of particular groups,,_for being substitutable, raising the demand for an, particular group is to raise it for all. Any actual economy, not surprisingly, falls in between these two extremes, and if is of some importance to see towards which end of the spectrm it falls. Yor the relevant policy prescip;tiods for raising employment levels and/or incomes of particular groups wili differ greatly, depending upon wbich end of the spectrum a particular economy lies. So far, we have looked at the matter in a relatively static-- world. Now consider growth in the labor force, ad accept that at least in the short to medium run.- the substitutability of different types of labor may be limited, in part because of the different lengths of tine and resource. costs of training in specific skills that maybe necessary to provide this substitutability. in this case, any initial rise in the demand for a specific "typell of labor relative to its short run supply will initially raise its wage. This will in turn provide an incentive for other types of labor (and/or employees in the lindustry1 where demand has risen) to invest in the necessary characteristics to provide an increased supply of readily substitutable labor ±n that particular industry. Thus, in time, we should see the initially expanded wage differential in this industry/occupation decline relative to others. The narrower are the initial wage differentials and the more rapidly they are narrowed during che growth process,- the closer wil the labor market correspotid to the co=petiti.ve end of the spectrum, and as a result, general policies to th:!6 :!S- -=- later L: uld Ce sufiiet e mse incomes of 2/ laborers (including the poor) in general./ This suggests that, for ouz purposes we need first to detarine whether there is any evidence for the Philippines which provides a primafacle case for assuming that there are rigditie in the labor market which lead to its segmentation by iterest types of laborers, so that one needs to be concerned about the compositian of labor demand during the growth process, as would be the presumption on the "structuralist" view of these matters. Secondly, -we need to examine how rapidly (if at all) particular industrial/occupationalaregional ,wage-differentials have altered in the Philippines, and if they have done so (as would be pre- dicted by the alternative 'competitive' view) in line with the changing excess demands and supplies for the relevant type of labor. We turn to an exam:nation of these twin aspects of Philippines labor markets in the next two sect±oi. of th:Ls' Chapter. 2. Are Philioines Labor Markets Se-mented? The rgidites which ay support the "fstrncturalId view or labor markets would have to be adduced to both sides of the labor market, If It is unlikely for 7arious reasons which are concerned with problems of providing incentives and devising optimal monitoring schemes in a world of imperfect information and uncertainty, that these differentials will disappear, even in a competitive world. (See Lal (1979a)). 2/ For with a given overall supplyof labor, the shift of labor (as a result of an increasdd' wage differential) to the high wage industry, will lead initially to excess demand for labor in the low wage industries, and thereby to a rise in the wages of their laborers. At the end of the process, wages in both the-high wage and low wage industries will be higher than they were initially, but with the ultimate "equil- brium" wage in the high wage industry being lower than the level it rises to in the very short run when it raises its labor demand. - 69 - as cne assumptions we maae in ouzining an exzreme version of chis view make clear. On the side of demand, at least in the short run,thera maybe relative fLcity of labor co-efficients for different types of labor by particular industries, for essentially technological reasons. But over the medium or long run it is unlikely that an absolute lack of substituability of different types of labor for essentially technological reasons will be found. Moreover, at least in an open economy, the com- position of output is not a technological datum. Through the choice of appropriate products which correspond to the available factor endowment (inclusive of labor of differant types) in the country, in effect, sub stitutibil_ty of different types of labor on the demand side of the labor market would sem to be feasible. - It is essentiallyon. the supply side of the labor market, there- fore, that we need to look for evidence of rigidities in the supply of different types of labor. Ignoring natural differences in abilities and innate skills, these rigidities in supply for particular types of labor would have to be man made. The most common form of rigidity adduced is that flowing from barriers to entry in particular occupations or industries imposed by various fors of combinations of labor, for instance, in medieval occupational guilds or modern trade unions. (a) Intergenerational Occupational Mobility Equally important, are the barriers to entry introduced by certain types of social practices, like the caste system which lead to what sociologists call social stratification. To some extent, every society will have different social classes, and to that extent be stratified. For Qur .purpose hQaevetr the important factor is the extent of social mobility amongst these social classes, and the correspondence between social class, occupation and income. In the most rigidly socially stratified societies, as for instance Table 33. MOL'ILITY FROM FATHER'S OCCUPATION OF SON IN 1973 (Married male 25 to 64 years old) Outflow Percentages Son's Occupation in 1973 Father's Occupation at age 1) 1 2 3 4 5 6 7 8 Tot:a. 1. Professional, technical, adminis- trative, executive, managerial and related workers 37.7 9.0 1.3.9 6.8 8.3 10.0 11.2 3.1 100.0 2. Clerical workers 24.0 1.4.1 7.3 14.0 12.7 18.8 7.3 1.9 100.0 3. Sales workers . 13.0 -2.8 42.5 5.4 14.3 8.4 8.7 5.0 100.0 4. Workers in transport and communication occupations 10.1 5.4 10.9 27,7 27.3 9.6 7.1 2.0 100.0 5. Craftsmen, production process workers 5.5 2.6 6.2 12,2 42.0 7.6 13.9 9.9 100.0 6. Miners, quarrymen, sports and service workers 10.0 5.1 10.6 9.4 18.0 23.6 14.3 9.0 100.0 7. Farmers and farm managers 3.0 1.7 3.4 3.8 8.8 5.7 67.0 6.6 100.0 8. Farm workers, fishermen, hunters, loggers, etc. 1.5 1.4 3.9 3,7 8.6 5.8 15.5 59.6 100.0 Total 5.5 24 6.3 5.5 12.3 7.2 47.9 12.9 100.0 * This table is to be read horizontally. Source: Castillo (1977), Table 16, based on E.A. de Cuzman, Occupational Mobility in the Philippine.,: 1973 Research Note No. 38, University of the Philippines, Population Institute, Jan. 30, [9/5. Table 34: ilobility from fathier's occupatfon to occupation of son In 1973 (married male 25 co 64 yearo old) (Inflow pcrcentages)*. Father's occIpacton Son's occupation in 1973 at age 40 1 2 4 5. 6 7 8 Total 1. Profassional, 'technicl, adminiscrative, executive, manruerial, and related woricers 25 14.0 8.3 4.6 2.6 5.2 0.9 0.9 3.8 2. Clcrical workarn 5.6 7.4 1.5 3.2 1,3 3.3 0.2 0.2 1.3 3. Sales workers 10.3 5,1 29 4.3 5.1 5.1 0.8 1.7 4.4 4. Uorkers in transport and communication 3.9 4.7 3.6 0.5 4,7 2.8 0.3 0 3 2.1 5. Craftsmen, nroduction process vuckers 7.3 7.8 7.2 16.1 24.9 7.7 2.1 5.6 7.3 6. Mkners, quarrymen, sports and service workers 8.6 9.8 8.0 l.;1 7.0 15.5 1.4 3.3 4. t 7. Farmers and fann managers 35.4 44.5 .5 45.2 46.2 50.9 90,5 33.4 64.7 8. Farm workers, fishrrnen, hunters, logg~ers, et . 3.1 6.8 7.4 8.0 8.3 9.5 3.8 54.6 11.8 foai .:a 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0o Source: Castillo (1977), p. 50, based on E. A. de Guzman, 0ccupat;on'al Mobility in the Phi IinUS, 1973, Research note No. 38, University of the Philippines, Population Institute, Januny 30> 1975. *This table is to be read vertically J-a~~a~-agrarian syir- ozc ;Ace~ ~i~y~~a ~. .da a system, there is little or no social and occupational =obility amonast .airly narroTw!7 defined occupational groups. Occupations and the accompanying spot on.the social and income ladder are passed on from father to son. In such societies, clearly, the extreme assumption about the lack of substitution on the supply side of the labor market made by "structuralista" would at least have some validity. it would be of some importance to categorize the labor force in terms of fairly arrowly defined occupational and industrial classif4cations (roughly corresponding to those within. which occupational mk-bility was pemissi~ble and hence feasible), vithinr which labor could be considered to be substitutable, but amongst which such substitutibility was eithe. very low ortotally absent, on the supply side of the labor market. The problem of matching labor demand (and rais: g that for particular occupational groups) to the extaAt compartmentalized or "segmented," labor force would then be of importance, and the comnositio of labor demand, a matter of concern. The evidence on accuDational and social mobility in the Phili- aines has recently been surveyed by Castillo (1977). Tables 33 and 3A summarize this evidence. These show considerable inter-generational occupational mobility In the Philippines, though as Castillo puts it: "some occupations have more 'holding 2owe= than others," (p. 48). Thus whilst 2/3 of farmer fathers also have farmer sons, 26% of them have sons who were able to move to other occupations while about 7% "slipped down to farm work." Even at this bottom end of the occupational (and income) hierarchy, nearly 40% of farn worker's sons moved up the ladder, some -73- to the very cop, Also, increasingly, there seems to be two wa,7 occu- pational mobility in the Philippines. Thus, amongst those at the top of the occupational hierarchy, (viz. professional, technical, adinistrative and managerial) nearly 60% of the sons moved down to lowe,r level occupa- tions-' Thus as Castillo concludes: "If one comes from a farmer's fily, the probability of being a farmer too is great, but there are those who manage to climb out and up mainly through education. On the other hand, chil- dren of professionals and e=ecutives do not necessarilyend- up like their parents. A majority of them slide down the ladder. It also seems easier to move downward from the top than upward from the bottom. Apparently, staying on top is just as hard as getting there" (p. 48). Furthermore, as Castillo (1977) emphasises, though the Phili- ppines has income inequality it has a good measure of social equality. "Except for the Moro National Liberation Front movement in indanao, the country does nor have a c%ste system, nor does it suffer from serious racial, ethnic, religions, and sex discrimination problems which other countries are afflicted with ..." (Castillo (z -cit., p. 43). With a high school enrollment ratio and with the proportion of population in college second only to the USA. education has been an important channel for upward obili ty. (b) Intragenerational Occupational Mobility Further evidence of the lack of occupational rigidities in the Philippines labor market can be gleaned from the occupational distribution of farm households. Unlike or ins ara ;in)SEfK Asia, tpafcar~ classes of labor are either specialized by the types of work they do, or can be distinguished by characteristics si: ,;! landlords, tenants and the landless, in the Philippines the rural labor force is much more homogenous, with the same laborer slipping it, and out of different rural occupations as - 74- weli as agraraan status hairec laoorer, snare cropper, cenant Zarmer or land- lord) with great ease. Thus, whereas in much of South Asian agriculcure, most of the. hired laborz is genuinely landless, in the Philipines as Castillo (1978) points out, at least "five types of hired fa= laborers have been identified; farmer-hired laborers (that is farmers owning land who hire themselves out); children of farmers; "oure" hired labor (landless); and landless hired labor with farm cultivation privileges" (p. 353-4). More- over, as a nmmber of surveys have shown (see for instance Takahashi. (19701 Estanislazo (1965),Rutran (1966)), unlike South Asia, where an economic distinction can be made between the supply price of own-faiEy and hired labor on the farm, leading to differing labor input/hectar by tenurial class, no such distincitons can be made in Philippines agriculture. The survey evidence shows that there is no difference in the producti7ity of .arms (yields per hectare) between different tenure groups, which implies a coon labor per hect=re input, and hence the equation of the marginal product of hired. Labor with that of own family labor on the farms (see Lal (1978) p. 130). This is not surprising, as own family workers do not work predominantly on their own fams but hire themselves out to other far=ers (see Takahashi), so that, the rural labor market is fairly integrated, and labor's implicit marginal productivt7 ,ill not yar7 by type of labor used on farms, as would be predicted by the segmented labor market hypothesis, The same appears to be true of so-called off-farm activities. These consist of a myriad of activities (see ILO (1974), p's 508 Castillo (1975) p's 240 & ff). Thus in a survey conducted by Abarientos at al (1972), "eighteen different sources of off-farm and, non-farm family income' were - 75 - mentioned ... tric7cle driving, buying and selling of rice, crops, livestock etc..; sari-sari stores; tractor rental and operation; harvesting rice; duck raising; sale and hiring out of carabaos; taking care of coconuts; carpentry; dress-making; working in the factory; working in sugar cane fields; gathering banana leaves; hunting; fishing; poultry ra-tsing and money sent by son in the Navy." (Castillo (1975), p. 241). Moreover, the typical rural household has multiple sources of income (see Appendii Tables A 20 - A 23), with members of the household employed in varied on and off-farm activities. Thus, the LO employment mission noted that "if the sum of the percentages of families deri7ng income from each specific source can be used as an index of the degree of diversity- of income sources, then it maybe concluded that the more rural and agricultural the family's location the greater the diversity of 4-ncome _sources, This relationship maybe att=ibuted to the greater sea- sonal under-employment and the lower income in agriculture: hence the necessity of seeking income and employment from other sources . . . Income source diversity within the family reflects the fact that neople - are. mobile between sectors in a 2iven location" (ILO (1976) p. 508, emphasis added). This implies that, not only are there no barriers to entry in different rural occupations in the Philippines, there is considerable intra- sectoral labor mobility within the rural sector, 'Leading to a fairly well integrated market for relatively homogenous rural labor. The industrial classifications of the labor force by occupation with their implicit assumption that some degree of labor market segmentation by occupation - 76 - is important, would thus seem to oe of little use in Philippie rural labor markets. Sizilarly, it would be foolish to think of special occupational "target groups" such as "poor fisherman" or "coconut workers" or "handicraft workars" or what have you, because there are few whose sole occupation can be thus categorized. What we observe in the Philippines, therefore is a rural labor market, where there is a shifting overall demand for labor over the year, which leads to corresponding fluctuations in seasonal earnings,_- but, any attempt to decompose this demand by particular products or occupational categories would be meaningless and at best a mindless arplication of categories which are only valid in a labor market which is more occupationally segmented than is the Philippines rural labor market. With the growth of wage and salary employment (particularly in Urban occupations) which is likely to, be regular and full-time, there is likely to be less time available to make use of other income-earni.ng opport=nities, and hence a reduction in the diversity of income sources. We have noted the growth of wage and salary employment in the Philippines in a' expected "'etween 1961 and 1971 there was a decrease in income source diversity in both rural and urban areas" (ILO (1974) p. 508). 1/ Thus in our field trips we sought to interview a number of coconut workers, who it was felt, on a priori grounds were a poverty group. It soon became clear from the interviews that there was no such thing as a 'pure' coconut worker. There were workers, who owned land)were sharecroppers or lesees, who also worked at times as coconut pickers tuba gatherers, fishermen, hired laborers in both rural and off-farm activities, as well as on various non-rural family enterprises. - 77 - sector showed (Tidalgo and Jurado (1973) -"nearly all (96-8%) of the work force indicated the existence of other sources of daily income but of less than 500.00, the rest indicated additional daily income of I 150 to 1,500 and above." (p. 33). As one moves to the 'formal'urban sector, or its rural counterpart in terms of full time workers on plantations (such as sugar workers), the occupational mobility of the extant labor force naturally A4i-rni+=hes. This does not mean that these labor markets are in any meaningful sense segmented from the markets for other types of labor in the Philippines. To argue that case it would be necessary to provide evidence of implicit and explicit barriers to entry into those occupations. We have already seen.that there seems to be no evidence of any social barriers to entry into particular occupations and with the fairly wide and increasing spread of ed- ucational opportunities,the means to acquire specific sk_Ills and qualificaticns for particular occupations would not also seem to be foreclosed. c) Geograohical Mobility Next we exmine whether there are likely to be any locational barriers which prevent different locational labor markets from being linked, and hence tend to lead to a regional segmentation of labor markets. If this were the case, then even if industry or occupation specific policy interve.tions were not called for within any region, there might still be some need for regionally differentiated general labor demand increasing policies. Primafacie, we would expect that an archipalego like the Philippines with the resulting barriers posed by differential transportation and other costs of movements from low wage to high wage areas,'would at least tend to regionally segment the labor market. One way of determining to what � iahle J5: ?-с��:асее Ьу деял3_7 (1970}, 1-вс lпter-p;vvincial д.,Ьrасlап (156д-1Э70),й ре:свяс ehaag= ia „� .: с£ Езс-� а:.с'`зт.. зiге С'.95�r 197.)J3nd ;адех о: _ссаl ?е�:еiср-еле. � .о�,=-,^-л-- �--�_ - --- -. - ,. угС lпсгг-рси'l:RCfS! ��г- t^�^:,• ..." '- ;сд�L:у аlргцi.:л, 9?о�•iч`i�� ;i�. �: a casn )❑а, с�и1 ?с:Сеа[ � - и�чЭесг +�м _ ' ..� _- ' - _ -.:veEccr.�nc uтsan . л � U1pPСпсг i22.J 9 з -11 - � :гч !rnsfГ++ ^evv�-ere vhtc9 . тгсtъ:ггдг"с - .тас.ип tELьan 25.9 i� 7,279 27 26 29 15 19.7 - g�va ;lгсауа ]1.9 + 28,519 Z3 2S 23 I6 23.l1 ` дqца.вт (А�е.) J9.D + 5G,29I 17 , dei `Сагtв (101.Э} 21 J2 -i4' 76,4 да1 5иг ( 19.5) 9д 183 23 1а.9 �)ukSdaoл :д.0 +{ОЬ,l00 111 209 19 1: 13.2 1и3е1а ЬО.д' + 7,9;2 2� J3 -i7 13 13.� , ZsmЬoaпga да1 Чпгsа 57.b '+ 9,уз9 45 5д 10 15 Iй.S Сд;а3асо , 69.5 т117,S3J Э1 д9 -Э5 Z.� 14,б . pavao (Аче.) 75.0 +i91,Od8 21 _ - да1 \ar:3 . {`�+.ч) 2J :$' -i3 2д.0 '• де1 5иг „(1�.1) • 9 � 7 1k J0.7 бгiааиl ( 4$,0) Ы 9I ' 21 19.1 qискол 82,3' + 77,1+2 i4 :0 2 г7' 29.3 2ssг�xlcs 92.а ' �+ i9,9S0 l 1 2 28 ,С.S �л.mboaaqa dai 5иг 1о4.2 +• 1,009 41 • 6Ь -10 17 13.3 S. tcv_ депаiг+ вгwiпеет L�L•г� ° - ' тг:lпсегеС ner оис'=1ггlе.оа � . �..'� _'�' гсе. ?raqiяcv ta.4 - 11,1о0 1э 1з 1а 1:. з.г - ьасмп '`�.5 .. 1.а44 -18 -zo 7 ю 22,0 Сацуаа 64,6 - 19,0г5 6 7 - 9 14 14.7 5urigaa {kve.} , 68,0 • 183 гсi Кот:: (87,г) 4 1ь -iг 18 2z-7 да1 Sur {56.8) 11 7 20 L' 2б.6 �mar (дvе.} 74.0 -157,545 � • Кагк4ега (57.5) -16 -17 -iз IS :О,Т ' 1:tвеака , f62.+} -11 -12 - 7 17 .4.6 С. ЕSц6 dг.nsfп vглгiаесв vh:ck � . ггядвсегед _гС C�tLт.. , цг.а1 � 15:9.1 +734,li52 -19 -20� - 4 10д В5.5 ?a�acga . 41b.1 t 3&,097 - 4 -11 1. 13 31.7 Саr1Сп цiУ+,0 т 2Э,С45- -1д -1д• -�6 •• 33 50.2 Laг,�.asa �47,6 г 6�,755 - S -] -10 зЭ 50.1 Зиlасаа ]13,0 + :3,;37 -1д • 9 -12� 31 47,9 SaCпagas :42.Ь �- 31,140 Ь 8 -I4 'л2 14,7 :i:vdoc-р Оегlдап_t2 " 1'J+.9 +:J,615 54 10д 9 19 2�i.1 нсадлга arseacal , цг.4 r Э,9за 23 зо а 19 i7.s 8аеааа ц7.S i• I4,693 I9 26 - ц 26 22.0 циаvа .cS)а . 161.1 �f• 1],231 3 4• - д • 'ь'r ц.9 �. F.Iдh дспвiсv .гае+-С,т ,.г;с±. . • • тр�.1. ..G�1 " - " _п , kaalia 34764.0 - ss,7CS 10о,0 , СеЬа ' • 321.2 - 47,24з -11 -10 -25 40 34.? A1bay 264.0 - 77,0]5 - 15 21 -12 70 �7,1 Рааqдаlппа 258.1 - 92,757 2 3 -11 з0 19.7 Lь VnLoa 250,3 - 7,527 � 14 -41 23 ц,4 • :1о11о 219.4 - 89,:49 1, 4 ;1 70 28,7 5окаовосг 194.4 - 57,55б 1 Ь -19 21 2�.8 Аедгоа Oeeldtnu 1 1+54.7 -25$,396 -31 -77 -ZЬ 29 зЭ.4 'ьагlас 193.Э - 1,s28 - 1 2 -15 25 16,7 t�дrrlaea 5иг 18о.1 -lG+,?е3 11 20 -15 2+ 21.J !.e7ei 177.2 -2�б,;29 3 12 -1� 24 . 21.6 Ъоhл1 • 166,0 - 64,4�5 4 6 -Э1 27 14,1 Н1ъ�1с С<с:дсаиl 15-5,9 - 13,:73 а 9 - 3 26 15.9 _ �`, Su1u ISE.4 - t6,09s •; 4 -20 19 17.5 Кarlr�uqua , 150.2 • 11,Z._ • 9 - 5 -24 23 ц.5 Lap1s 149.6 - 25,д17 1 - 1 3 2S, 13,1 11оса� 5иг 144.3 - 3� ,+3] 1 1 5 24 16. 7 ,(ilea 14й,9 - :�,3.`1 -l5 •13 -17 21 10.5 Кisaпia 4ссlдааи 1 llг.S • 6,3L4 7 15 -17 28 15.9 iltjrva Orleacil t.5,3 - 72,aG9 - б - 5 -10 � 21 17.7 � Geдaeiaet Nr.:a 124.1 • 4,Э92 b 15 - 2 23 25.0 2cwbloa ' 1:.J.. 12,779 •t0 - у •i1 19 1..5 • Lac.ao де, Sur 117.Ь • д0,::3 79 77 -J4 18 23,4 lлсlqив 114.7 •:1.97] : 5 -76 21 13,9 . lагааа де1 Чопr 11],2 - 2L,ЗЭ4 . 1S 22 -17 17 д,7 Сыцпдивnеа 107.й - 43,1GZ 1 7 -19 23 11.6 I1осса $агс4 10i.0 - 14,0.9 •l4 -i4 -,4 :S 2G.« 5еитее о! длса; :- Yteo а У.;�агея, ор, е3с., '. - Уип К1а, ор. с3т.; 3� Аи,^ааи cf ::адиа sn1 5tsc:etas, 19бд aqd 2971 Сегаилсо of ,lgгlculLцre; Ь- Оеовгсгмаt р! РиЬ1.с +ocka and Ссхд+.тLса:.спц, iгuetGUCe о! P1дn,aZar, ,7.?., ?hqвtexl г"?aaning Strac-«7 loc cha P:.1lppinea; ?приlдсlяо Srдnda апд "caiпcSam Crcиch Arcaa, 1971 � Sourea: Gaei11� (19?2?. д, 91G. 79 exzenc chis is the case is to consider the past oaczerns o regior-al (as -qell as sectoral ind ,lige-t-her- I nz ILan" the direction that would be nostulated by the 'ccmDetit4,e' hypothesis about Philippine labor mar-keta.. Table 35 si-rtzes various statistics- on intar-regional migration and regional. characteristics compiled f;70= various sources by Castil-Ic (1978). This shows that "the in migration regions are oz t-jo kinds: Northe= and Southe= Mindanao which are more agricull- tur" and central and Southe= Luzon which are the most non-agricult=al among the regions P-Tcant f or M-an-t1a." (Castilla olo. cit., -o. 863) . The 'low population densit7 prov-inces have low indices of -,aral. development, but amongst them there are some (Group A in Table 35) which ha-ve net in migration because of the pros-pect in these areas of getting farm la-ad, .UI the provinces in this -o registered increases ia number of fa.,.-Is with s 14 ght decline in larger f arms" (Castl 110 0-0 cit. , p. 813) . 37 const-zast, the low densit:7 pro-7inces with out migzatto n (Group B) , "have little or no opport=:Lt7 for (increasing) farmland" (ibid) . Amongst the hi-,h populAt.ion densit7 provinces,. the recei-ving net in m-fg-zants have 'a high -4-dp-,- of-development and hi-h '"e-l-ees of urban4sation whic-1, tends to be the magnet attracting migrants. By coutrast, the high density provinces with net oult migration have a medium index of total development and in cc=onwit,,j, other high densit:7 prov-inces,declining, opportunities for farm land. Zac'harirah and Pernia (1975) have also analyzed these ral a-rat-; on trends and conclude: "Inter-regional migration during the 60's and presumably rural- urban migration also, was determined more by the socio-economic conditiors in the receiving areas than by, those of the sending regions. The economic pulls of the Man±-I-a region and Y-Indanao were more important than the economic push factors in - 80 - isa7as, Si-cci' t. h aeo u-irto i noc show staciatically signifian: czrrain with any of the economic characteriscacs o. cne regions oj origin, ouc showed significant positive associa-ion with the average family income, rotal acerage of unused agricultural lands, and negative association with the proportion of poor in the rural populat4on, and urban unemployment rate in regions of destination. Of these, the average family income at destination showed the strongest association which, together with the acerage of unused agricultural land, could epain about 45% of the total variat±on in inter-regional migration streams." Thus it would seem that,despite the natural barriers imposed by Philippine geography, no marked segmentation of the labor market by region can be postulated. c) institutional Barriers This leaves possible institutional barriers to entry through some for= of "closed shop" by exIsting workers in high wage industries, thregg' trade union action. There is no evidence of any such restrictive labor practices in the organized sector in the Philippines. it would appear, therefore, that there is little evidence for the Philippines that its labor markets fall near the segmented end rather than the competitive end of the spectrm of possible labor markets that we had outlined above. 3. Changes in Wage Differentials The wage data we have assembled in Chapter-2, Section 5, represents various averages, which do not standardize (in the statistical sense) the :elevant wage data for the other chazacteristics which are held to be constant. Thus as Tidalgo (1975) puts it: "There is no reason to believe that the daily cash earnings of individuals in a group characterized by an occupation, industry, sez and region would vary in the same way as the 7amTL Regrss: an I RegressiLon I. and bntng L00af 1..00 a/ 2. arxL an.1arigLI. .32 4.. ci y gas, «at2 ancL san±tary serves 1.36. 1.65- 5.. Costrctin.1.20' 1. 49 6. camarz- L.24- L.446 7. "ransport, srcrage and c cm g t:ýt .39r L.5 8. GOver=mr,. -"m tY, busin=sa- and recat:Inal servia . 8. Z. 04. 9-.QPrsonaL.Larcs 8,,8 1. Profssional,. Mede and ra.latad. worker, 2.06. 2..Prorieors moerz, a,-fm4 t=at=r and; off.eatLe 3.60 3. Cr e,afc and ralated workers 1 68 4. Sale~sn and ralated varkar3 .87 5.. Far frs, ar. laborer, fzhean,. a lumb& and ralatid workers. 100, a 6.. WTorkars ±:t ±ina, quarr- and. e.aad. øCcPar*on m - 1.04 7. Worker i= aperat±g apot. oce=atins-..95' 8.. Craftamn, factor7 operatevr: and wokrs nralýated ocuaio. 1 9.. ianual o and Laborars-, .a.c. . .90 10.. S4r7icf and. rlazed. wozrxr: .91 III. Skl .4- 2. Seiekilled 1.29 3. Ums1ea'ad 1.00 a/ t7'. Rein 1. an-a. nand Subu=bjw 1,00 a/ .00 al 2. IZoc - ounta.n Provinca. ,86 ~87 3. Cagayan Valley and Barane» .60 .71 4.. Cnta Luzon ,90 .88 5. Sourer L=zn. and raLnda. 1.06 1.04 6. Bcal .89 .82 7. Weselr Vi3aya8 .75 ,78 8. Zaster= Visayas .76 .78 9.g Nrther Linda=a .83 .74 10. Southern MIndanao and. Sulu .84 .84 7. Se= I. ale 1. 32 .16 2. Yemala 1.00 a/ 1.00 al al The base per 7ar:abla. * Regress±on I and d Source: Tdalgo (1975), Table 60, - ! � . . . . . . .. . . . . . . . . . - l � � д �а � о rr � гу п п о� w ~ гч, � а. р. и?, �ll л 4Q N о ��' а I(? 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Q, ro у й и т �г' т аа м � � �л д � .'п3' +го* р' гаr µ � 4 � � �- �' .,' . , т п � w л � а и- � л ь-� го n .. �а о � ь-� И о а о �• т оq а tr ►д � п т q р ro н, и• Н т Н• го п иМ�уΡ Е иN w н [л �j� Й w F-�• й Р• � л 4 rt � c�i Н � й и л ц � i �б п tn `1 р!-� а о su � гд �r rft О � rn `д и r и .. � ч� ,�о to т л р• 6w-� р г °р � rt Е1 р } и � о '• � G � м rn N Н' о О рΡ о •b ri, Р, т Iо т дΡ --+ са. • ro о rt Ь�• гt `д А�• п а л w о ° � - rr � t�• СС W ь1• �. го у б-�• с�. µ �, 1�� � �. �� - т 6у (L и v� а W tto � W ro 1 � � i-� n г�• rn w о� о' rh и ry � rt п 1у N а• W `А Н о р. � т о r� :ю с'. а° о �'s а а и �r- аа п р г-;. 6n а б+ л �° • п• �и w iп i-� � о t i и � � iд � � � � - а �а � � о п � z w .-, р � 'д N• �L _ �• �' о т и п G �б .� ti л п N о р N n Ь-� ибц р` ь-� р с� п q � п а п N л Н й с� р � р о ги р г -Е� о о а � р Н N tr а' Н ,a� и to , л го Р• и °д 1 а а и w . � W �• рг' Н ., G и г�, А' G '✓' N rte г j п п � р б-` и � N N R, р :� `д р• О О W гв ь-h ��1• о t{ га. {D и Е 4 N о :,� л �, � и fD W fD гi G rt п 1•h r1 `! i.1 �рΡ рΡ� N г� rt и Н а а. 1-�- W v г�-r N � 9 � f� f--' О р О � п Ф д (гоЛ ,д t%�` `�i Р. Гаt 1-i• (П С и С] 1 Ci п О� О *i П1 W N а j�; а ГА .. о1 р, - й N ¢• о � .-. I т А н, й .� р t� рΡ гi Р о' Н У5 г t . 1-� • п av N• С Р. N• Н- о п � ~` � г �'' � ш п и л о а � о� л � р г� г+ а а ro 1 �г го й. й н, й о t-пы ь1 й °0 � о р п п у� а р' го . о- р г•t }-' N• !и Р• л О !� i' о ..иi н б-!. tD t1 N �• � rt (D � �zа' (П р Оц и о н а n го о n �у. р г�, н а� о, а �-ь. ш t�- н• tn н г t - гr � rt а т � � п• .д `д � га, � r� rt n ru г, • p 1� N � а М I.�- И��. (� �т' Рд 04 {" l �гг 1� n и р о f� Fз to •д F�• •гi � р' и F rr рΡ N• а h, ia- г-�� Н. .. R. Н 1-� WW а4 rt W а о - й у 1а-� N о w ta-` i. j w 'го н, го � о �г п и р• Н r6 р n го � и и р � и г j о � 1 т р i� го р ь-� и т го р го гг ^ У � � т гn п й о w и и и Р• н, ii " rpr го й � ь°�д �'" н, Ё ran rar а• д� �ri Н, • д W и� k�-� N Н `г-'1 F-� � � � • '_ п и и R. ги , т �• го' и г° рΡ? .т т р гНи гµи rn .д а W 1й N !п t-`' п N n• о� р Е �i о п � � i й о roi ш �- �G�' С. а• го у А. � р й й• н� � ггоi � р �г' � t�• � СΡ Е и N• t� ► ь ro � h�• п (� � t г rt � й рΡ I t�' r+ и �о tu ov Н • ro и и п, � и п го i-i t� � п {�. о . rn л а, о грr to- о, гL � го ю т о fЭ ►-г � Н- рг 1 � v н, � м � � р. п � � •� .� � ] н гг ьд i� и и �т t-� � би ; каi о i� а � с�. го �+ р. а oQ го с (D v, N N " О р Р. W М Н tл N �-�' j_ р } п Н п ги w а �' п 1 а N �г- rр-г � � � го }.,. р' и � р п F-� W � уц� U � tu о !-• 1 U' , � и -� �., ' � ги . � TabI a 39 9 6 c raz:--fos') Ratio of 1969 'jeek-ly Cash Earnings Weekly Cash indu3tr7 EarnIngs to 19 5 7 1969 That oi 1967 Money Real i.ýoney Real Male 1. Ågricult=e, forest"y, f±ý5h4=g and hunting 8,62 31.20 20.33X 3.62 2.36 2. v,-txLlng and quar.-7ý--g 20.61 34.20 22-.'29 1.63 1.06 3. xýf=uf a cturing 20.42. 35.-73 23.31 1.75 1.14 4. Elactricity, gas, water and sanItary serv-ices 23.32 40.70 26.53 1.76' 1.14 3. Construction 19,16 36.55 23.83 1.98 1.28 6. Comm,-rca 26,30 37.60 24.31 1.43 .93 7. Transport, storage and cc=mm:Ica- tion 5.29 41.43 27.02 7.84 5.10 8. Government, community business recreational se--lice 14.31 46.70 30,44 3.26 2.18 9. Personal services 23.94 28.10 1.8.32 1.17 .77 1. Ag-riculture, forestr7, f:lshýmg and hunt:l=g 5.25 22.20 14.47 4.23 2.76 Z. Mýaz&acturý=g 10.09 26.71 17.41 2.64 1.73 3. Electric:ýt7, gas, water and sanitar7 se=7±ces 8,81 31.67 20.64 2.59 2.34 4. Co=,-rcu 32..05 28.60 18.63 .89 .58 5. Tý-sport, storage and 3.33 ý-.48 l)i.is 91i5 3.96 6. Goverum-t, ccmmuzit7 buzJLZess and ri--creational ser-qýLca 8.69 37.70 24.37 4.39 2.88 a/ These were the BOSSE, May 1957 median weekly cash aar-aings standardized for a 40-hour weekly wark schedule. b/ TIese were the RegrQssian I Cran on BOSSH, ',,Ly 1969 data) coeffic±ents for i--dus-ýr7 and sex added to the -,-and zean; chese were also sta_ndardized for a 40-hour weeUly war.ýc schedule. c/ Deflated by the coasumer prices index for the Philipp-L=es in May, 1969, Source: Tidalga (1975), Table 91. ...... ..... - 86 - Table 40: RATIOS OF WEEKL- CASH EARNINGS I DIFFERENT INDUSTRIES RELATIVE TO THAT IN AGRICULTURE, MAY 1957 AND MAY 1969 Ratios of weekly cash earnizngs in dif-f4erent tndustres relative to that in agricùUture Industr7 1957 1969 Change from 1957 to 1969 Male Female Male Fea1e 1. Agriculture, forestr7, fish fishing and hunting 1.00 1.00 1.00 - - - 2. Mining and quarry±ng 2.39 1.11 (1.28) (54) 3. Manu:facturing 2.37 1.92 1.17 (1.20) (51) ( .75) (30) 4. E-lectricity, gas, water and sanitary servicas 2.72 1.68 1.36 (1.36) (50) ( .32) (19) 5. Construction 2.16 1.20 ( ,96) (44) 6. Comerca 3.05 6,10 1.24 (1.81) (59) (4.86) (80) 7. Transport, storage and communcation .61 .68 1.39 .78 128 .71 104 8. Governnent, comunity business and recreational. servicas 1.66 1.64 1.58 ( .08) ( 5) ( .05) ( 4) 9. Personal ser-vices. 2.78 .89 (1.89) (68) Source: Tidalgo (1975), Table 92. Note: Comuted. from Table 39. - 87 - '-IuLa ~z2a cccu;aticzzdd ~ con-=-ct as -'ch.- :ables 39 and 40 provide Tidalgo s estimates of the changing earnings differentials by industry. These show that relative to earnings in agriculture, all the differentials narrowed except that for gransport, storage and communication,whic-h increased. The latter, however, is due according to Tidalgo Cap.ct., p.323), to an error in the computation of the base period (1957) earnings of this group,which were underestimated. The greatest narrowing of industrial earnings differentials relative to agriculture was for personal services and comerce, and the least for government, comunity, business and recreational services- As Tidalgo. concludes, an exlanation for this differential contraction of the differentials of the groups can be provided as follows: "The important elements in the first case (of the Largest contractions in differentials) which may be operative were: C) relatively elastic supply of the types of labor needed by the industry, especially true because such types of labor needed were relatively unskilled, (2) relatively elastic demand for labor by the industry and C3) greater increase in labor supply relative to the increase in demand for labor in the industry. On the other hand, the likely operating elements in the second case were the opposite of those in the first." (Tidalgo op.cit., pg.327-28). Lacking access to the primary sample data from the NCSO for 1976 we cannot make a strict comparison for the 1969-76 changes in wage differentials with the definitive analysis of wage differentials by Tidalgo for the 2957-69 period. However, an examination of even the uncontrolled NCSO average earnings data for wage and salary earners by occupation and industry group for 1969 and 1976 is instructive. The resulting changes in occupational and industrial earnings differentials .relative to agriculture are smmarized in Table 41. 1/ Tidalgo (1975)'s estimates of changes in occupational wage differentials based on the WAPCO wage survey between 1956 and 1969, however, shows an opposite trend, but as she argues (p,318 & ff) this is because the WAPCO surveys cover more narrowly defined occupational groups in large firms (chiefly in Greater Manila) than the NCSO data, and moreover in her judgement, whereas the NCSO data is probably picking up economy wide secular trends, the WAPCO data is likely to reflect short run fluctuations in a relatively biased coverage of occupations. - 88 - .11:'JL LI,.IMG 07A~ OfýAZ AUÄ 5ÉZU1-,'_42-, Rtia to Ral Absoluce Percentage Weekly1 Earngs Change Changa in Agricnltura 1969, 1976 .BTInd"sr manuf 1.79 1.64 -0.15 - 8.4 2. Cost on L.79 1.64 -0.15 - 8.4 3. CO ca 2.1 2.12 -0.06 - 2.8 4. Transport,. Storage and CmMicztin 2. .88 -0.30 -13.8 5. Dc=est:c. Services 0.54 0.44 -0.10 -18.5 6. Agrcutur, 4=g, and Forest=y .00 1.00 Sources-: Detved. from: Table· 27, (NCSO: data) B. B-r Occiat-o0n I. Profssinal Tcncal. & 3-1ated. Workers 3.8. 3.0z -0.66 -17.9 2. n Zac., & anageriaL Worars 8,05 6.88; -1..17 -14.5 3. CGarial We~rkrs- 2. 34 2. 42 -042 -14,8 4.. Sales Worker .68 1.58 -0.10 - 6.0 MI.. ines, Quarr7 & Reatad. Workars 1.58 1.70 0.12 7.6 6. Workers in Transpor-- tacion & CoMuicAtion occupaticnS 2.26 1.88 -0.38 -16.8 7. Craftsmen, procesa and Related Workera 1,84 1,49 -0.35 -19.0 8. Ilanual Workera & Laborers nec. 1.68 1.30 -0.38 -22.6 9. Services, Sport3 & Related Workers 1.11 1.02 -0.09 - 8.1 10. F ar:ers , Fisher-en, Workers, etc. 1.00 1.00 Source; Dertved from Table A.24 (NCSO data). .. . .. . .. ...I.III . II Il.. ..,.-, ,.., - , .. . , . . . .. • - - . - - - - - - · . . - p+ - 89 - Sinilar t=ends as were observed by Tidalgo in :he 1957-69 -eriod can be obser-ed. Once again except for the occ-uvational wage differential for mining, quarrying etc., all other wage differentials relative to earnings in agriculture contracted for the industrtal wage diferentials. The largest contraction was in industries with relatively law skilled occupations, where as bi-fiore, labor supply to the particular industries can be expected to be relatively more elastic. The occupational differentials show a mired pattern of contraction, with industrial workers Cincluding those in transport and communication) and their complementarT skilled and wbIte collared workers having the biggest contractions of differentials, whilst those amongst the relatively unskilled workers (sales and services, sports and related workers) contracted much less (partly because, the initial differentials were fairly aarrow). The above evidence on changing wage differentials would therefore tend to further confirn the impression that, Philippines labor markets have functioned fairly efficiently in the last two decades, and that as a result, for our purposes, it is as well to assume that they work much closer. co the co=petitive end of the spectrum of labor market classification than the structuralist end. General measures to raise labor demand can hence be empected to be diffused through the various . sub-labor markets fairly effectively with little reason as a result for any special occupation or industry specific labor demand raising measures being required. 州 9-1 =de, Z is týa c.2ýo:Itzl Izbaz- zatic, y ýs out-jur- De-- head. nl e fu=c-ý:jzns -zetýresent t.ja ec=omy's 7<-lea=- homager-aus. p=duct:Lou 5=cit-40ns shi:!tý=& ch=ugh týlme. becau3e af Hazz.cd meut=al tachnical P2:09res:5- Zhe !atter that at a Si-7eu cýapitall autput ratio, th-e, Slone af the, lizP- C>vc , che =a=gý=1 product: af capitz-, an :he. lQld' (pre tachn4cal ",rog-.ess) pzoduction fu=ctioz y (givec, by the. slope at Po) is tllie; same as an the tuew' (post tzehnical Drog-zess) prøduction functiorl y' (given by the, slope aý: ?) Zt 4 -q wel-I I=Lown that t-he dista=e CYW =easuzes the wage per =a= - 92 - and WYo the profit per man, when the capital intensity is A0 and hence production is at Po (on the y production function). With Narrod -neutral technical progress, ex hypothesi, the slope of v4 P (where i is the point on y', with the same output-capital ratio as Po on y) is the same as WPo and the two are parallel. Hence OW must be less than 0W. Furthermore, if the capital output ratio declines (slope of 01a falls to 071, then the economy must be on a point PI on the 'new' production function y to the right of , which must imply that the slope of the tangent at Pl must be less.than the slopes at P and F (which are the same). This must imply a marked rise in the real wage to OW1 above OW (and a corresponding fall in the profit rate). Thus with Harrai neutral technical progress, a falling output-capital ratio, and rising capital intensity, a decline in real wages will not be observed. This is the assertion made in the text. 2. Real ages and Biased Growth? We have found (See chapcer I) :ha:, there is evidence of a falling wage share and output capital ratio and of a rising capital intensity over the last two decades in the Philippine economy. Pria facie, these trends would seen to be in conflict. For, as can be readily seen in terms of a simple aggregate neo-classical growth model, depicted by Figudre T, if capital intensity in the economy had rtsen and any technical progress that had taken place was purely of the Harrod neutral type, then an increase in capital intensity from k to k(in Figure 1) would have been expected (for a declining output-capital ratio, as ts observed in the ?b±lippines - See Table 17) to have raised the real wage from OW to OW1 2/ as well as the share of wages.- By contrast what we observe during 195964 and 1969-74. in the ?hilimpines can be depicted by Figure ZI, The economy has moved from ocint ., to noiat R, The c-4Rital outnut ratio Va.Ile ~~r capital intensity has increased from k to k1, and real wages/man have declined - 10 from OW to OW . From Figure 1I it is apparent that these stylized facts are only consistent if we assume that during the t-o periods of real wage decline, the economy's aggregate production function has shifted in the way posited, namely with zmarked "capital using" bias in "disembodied technical progress" in the Harodian sense (which would also be identical with a capital using bias 1/ ThIs follows because by the definition of Harrod neutral technical progress, we know that, the profit rate (given by the slope of the production runction) at a capital intensity k, that keeps the output-capital ratio constant, is the same as at the or±ginal capital intensity, The fall in the output-capital ratio with rising capital intensity from (V to VPY suggests that the economy must be to the right of k on the "new" y' production function, at which the slope (and hence the profit rate) must be less than at I on the "new" and k on the 'old' Cy) production function. Eence the real wage must rise. 0 2/ Williamson (1971) has est4mated an elasticity of substitution between capital and labor for Philippines manufacturing of about 0.9, and if this applied to the economy as a whole, there would be a small change in the share of wages and non-wage incomes in the economy towards labor. - 94 - 49 iWi F-GUI I y - Outpuz per head S i the production funct±on after c'aital u.sing biased technical progr:ess, - 95 - in the iksian sense if the elasticit-y of suscttuion between capital and abor were-unicy.) But why should this bias in di.sembodied "cchnical progress", have operated prJmarily in the rwo periods 1959-64 and 1969-74, rather than over the entire past two decades? 3. Real Wages in a Three Factor - Three Comodit7 0oen Economy M odel In order to answer this question, we need to come down from our aggregate height to an analytical fraework which distingu±shes at least three different sectors,_namey those producing (i) importable, (ii) exportable and (iii) non-traded comodities. Roughly speaking these sectors can (at least for heuristic purposes) be identified as (m) manufacturing (which is still mainlv imjort- substituting); (ii) the cash_ croms,. mining and other natural resourca intensive e=ort activities (manufactured exports still beIng a fairly small Part of this sector to count much) and Ci.ii) the rest of the sectors, whicbh_can _brqadly_-'re_Inokad.uon-a -eng-sery.ce-re-cas-cro- g±ctur - and the production of var±ous comodities for local/domestic consumtion. Now it is wel known from the extensions of the famous Samuelson- S01Der (1.941) cheoreI that, in a static economy Cchat is assu3ing given factor suppliesj there is an intjnate link in an open econony (lika the Phil±ppin es) between relative comodity and factor prices. Though both capital and labor 1/ But with a constant unitary elaaticity7 of substitution he,teem caital and labor and neutral technical progress the factor shares wou..d ave remained constant. For our purposes however, sufficiently Hicks or Harrod capital using biased technical progress, with the observed elasticity of substitution of 0.9 would be sufficient to yield the stylized facts for the Philippines economy represented by Figure II. A formal statement of the argue.nt wil. be found in Tehhnical Appendix 1 to this chapter. - 96 - have expanded in :he '!ptPies i.n tlhe past toacadas, 3 a:s-. purposes it is as well to see the impolications of particular relaZve commodity price changes on factor prices in the context of a simple static three good-two factor model of an open economy, with fixed supplies of Ehe factors, .. his will provide the necessary insights to determine the sources of the type of bias in "technical progress" that has led to the declining real wages In the Philippines. The model we shall use to explain the decline in real wages is stated formall7 in the second of the Technical Appendices to this Chapter. Its mechanism can, however, be fairly simply stated.' We assume that the importable only uses capital and labor in its production Cwhich would seem to be true of manufacturing, the major import substitute sector in the Philippines). The non-traded and exportable goods however use all three factors of product-on, land, labor and capital to produce their output. Horeover, we can rank the various industries in terms oAf their factor intensities roughly as follows. The importable is the most capital intensive (when this Intensity is measured, by the ratio of capital to labor - there being no land used In manufacturing production, we cannot make any statements about its capital -land ratio); followed by exportables (which in the Philippines are relatively caital and natural resource intensive) and with-non-traded comodities (a large part of which are services, a significant part of agriculture and small scale entermrises producing for the domestic market) having the lowest Scamital labor ratios_and_ hencebeinsz_the most1abar_intensy.e. . contrast eportables are the most land intensive, in the sense that their ratio of land to labor as well as land to capital is greater than for non-traded goods (the only other sector, which uses land). We thus have factor intensitie3 such thAt, importables are the most intensive in the use of capital, exportables in the use of land and non-traded goods in that of labor. 1 By "technical progress," we imply not necessarily technological factors, but rather various environmental factors which have caused a capital-using bias. - 97 - With i ayiven domestic comodity Drices of the three rar and any trade t=ces or subsidies), and with fixed factor supplies, which we asstme are fully eployed, there will be a general equ1ibriu configuration of relative factor prices, relative comodity outputs and relative factor sharas in the economy. Naw lat us _dist.rb this initial equil.brium in a number of different ways and see what effects that has on real factor prices (particularly the real wage) and relative factor shares. Suppase. first that, there is a rise in the domestic price of the importabla (due. to e-ither an increase in the degree of protect±on, with no change in the border price of importables , or else with unchanged levels of protection, because of a rise in the foreign currency prices of importables, and with the e=change rate f±-ed). What will be the effacts on resource allocation and thencc on relative (and absoluta) factor prices as a result of this rise in the domestic relative price of the i=porta'ble? This rise in the relative price of imp1otables will entail a switch in resources away from the two other sectors, (non--traded and axportable) to the imortable iector. Only labor and capical are used in producing importables, so the other two sectors will have to release these two factors. However, as the importable sector is the most capital intensive, the other two sectorsz.will be releasing more labor (and land) than is reaui=ed for expanding iportable output for an7 given Pmcunt of capital released for importables. As nominal wages are flexible in the economy, and full employment is maintained, this release of labor by the relatively contracting sectors wilu tend'to P~ut pressure on te nominal wage. A new equi,librium - 98 - will be achieved wich che nominal wage being lower and chence Fhe initially released,labcr .ill !- absorbed in all 3 sectors as a result of the substitution of this cheaper labor for the other factors of production in that industry. What of the real wage3 \he know that the nominal wage has fallen, and that the domestic price of importables has risen. The domesti. price of exportables, given no change in e=ort taxas, subsidies, the echange rate or foreign currency price of eportables, will remain unchanged. So in terms of both i=crtables and =xportables Cwith the donest±c price of the former higher and that of the latter unchanged) the real wage will have fallen. But what of the dcmestic price of the non-traded good. In the new equilibrium, we know that its price will be a weighted average of its factor costs of production Cthe weights being the proportions in which the three factors are used in the sector). As the money wage has fallen, the total wage cost component of an-traded good costs -of prodction will have fallen. But as the profit rate will have risen Con an analagous argument about the change in the money wage rate), the capital cost component of the costs of production will have risen. Finally, the rental rate on land (in this case - see Technical App endiz II will have also fallen. n that case, the costs of production and hence the price of the non-traded good will have fallen in the new equilibrim, but less than the money wage rate, because wage and land costs are not the whole of the costs of production of non-traded goods, and their decline is counter balanced to some degree by the rising costs of capital, Bence we find that the fall in the money wage is likely to be greater than in the price of non-traded goods, and as a result, the real wage will also fall in terms oz non-traded goods, We thus have an unambigious decline in the real wage, following an increase in protection in or model economy. 99. - 99 - Nex: ccnsider the case where the domestic prices of both traded goods (i=porzablas and e=ortablesl rise Cal'-tive to that of the non- traded good. This could be the result of a devaluation, or else with a constant erchange rate, if for some reason both the foreign currency prices of importables and exportables rise Cbut with no change in the external terms of trade). Once again we can work out the resource allocation effects. With no change in the domestic prices of importables and exportables relative to each other, but with both prices rising relative to those of non-traded goods, resources will flow out of the latter into the two traded good industries. These being less intensive in the use of labor than the releasing industry - non-traded good - will for any given expansion, and hence movement of capital and land out of non- traded goods, put temtra' labor onto the economy, whose money wage will then fall to maintain full employment. Once again as before,the fall in the money wage will :Lply a real wage reductinn in terms of both i-portables and exportables (whose domestic prices will have risen), and also in terms of non-tradeables, whose domestic price wll (for the same reasons as in the previous case) not fall as much as the fall in the money wage. Finally, consider the case where the domestic price of ezportables rises relative to both iportables and non-traded prices. This could be the result either of an exogenous rise in foreign currency export prices (at a constant exchange rate) or as a result of increased eport subsidization (with an unchanged exchange rate and foreign currency price of exortables). Once again, the relative commodity price shift will lead to resource shifts towards the sector (exportables) whose relative output price has risen. As this sector is intensive in the use of land the recuired release - 100 - of land from the other sec:or Caon-tradad) will,also :eease =cre labor and capi :a 7 th"'azn ~a a a - isiz i r atv a _ ts : zactor proportions in the =ortable sector. As a result there will be a reduction in the money wage Cbut given our. factor intensity assumptions) not in the profit rate (see Technical, Appendiz II), wbiph again for the reasons given for the other cases will also imply a reduction in the real wage. Thus, in our model, any rise in the domestic relative price of importables and/or exportables will lead to a reduction in the real wage. it should be noted that the domestic relative price of traded Ci=portable c- exportables) to non-traded goods being the so-called "real" exchange rate in the economy)has important balance of payments effects, so that, any artificial raising of the relative price of non-traded to traded goods in the interests of real wages, would. not, be appropriate. For such a policy could, if the initial 'realI erchange rate were an equilibrium rate, lead to a balance of payments defIcit. However, as will be obvious from the above sectin, any policy which reduces any existing distortions within the traded good sector by lowering the protection offered the iportables, so that thetr domestic price falls relatively to both exportables and non-traded goods will lead to a rise in real wages. it should also be noted that as we have immlicitly worked in a non-monetary economy, inflation has not appeared as a factor in our explanation of the possible sources of real wage decline. This is as it should be. For inflation by itself would not, (despite the popular feelings to the contrary) have necessarily led to a real wage decline. This can be readily seen in terms of our model. If, say as a result of monetary e=pansion, the price level doubled, but there were no accompanying changes in relative commodity prices then all the real variables including the real wage would remain unchanged. All nominal values would rise in the same proporticn Thus it is the particular . t • - Xr�dex NwЧbex (�.972�100) . :sc>.сэг� ?�,�.:���:.� �:..�sl,лл ii��.ь�� ��::�и.�lи :�i�.io � , .!.____._._____._.._.!._..._�.__....._.w_._.__.�.___�_._..�------.� ---_____.._�.._�.� ____...____----.l� . 1 � � � _�. 9 �,.i ! х; : ь к i� � � 19J� � +' . . � ' • � ��э�г� ! �г � . � � �� . ` 1'�'�9 i �С (�> 1 ! + • , � , -с У 9Ь0 �! 0 �� . ! ii 1 1 . � . � �i 19f�1 ( �С, : (д а �� �ie 19 Ь'�' ! Г>>,( . . ! � 1 � � { � 1��б3 1 ! ';, ! � � j 19b�1 } ! о ! � ь 1`?ŭ;S 1 ,и � �t i м ,� л � ' �'i+f, 6 i � � �' � о� � ,1 �... п � ! • � h. � г-� 1957 [ . р � ,д " ► 1 .,� » i'� b [1 ! � � ;и ! � � �11 1 Ч �i �i � % � , �� � С1. - ! R1 О � О � ��� � гэ i �; _. r w�, i а� ь i � 1 � �+ . � i 19�1 1 (а� � �Н го кiН ( n _ � � 15' %'.:.' ! n �`-' � `d 1 1 't . 1 ' �, ' � ! µ 1 1�;' 1�3 ! pr+ а� µ го ! й. г1 � r,-(�1,,,�„� � , I и ' 19 % 4 ! . �й µ j� . . л�Го -�� �.�,, ' ( � --� � ' � �, �. � , i 9I.� ! , � �� .�� . °�,. м !д , N � �, w � �� � � IЧ;Ь 1 ор � � ro "+ �л ! ' о ас ► .-. о � 1 ti''r`;' 1 �� ;� а а� � 1 �, " � ! � � (0 \ 1`?�'Е.3 ! __..___--_____ro :�, x ,--------� -------- ---�1i! �1 l 103 changes in relative commodity prices (ixrespeccilre Of Whecher th.e7 are accompanied b7 a general rise in the prive le,7el) which are the -'a=d-a-ental cause of the factor prtce changes we want to explain. 4. Ual Wage and Ralat±7e Co=odit7, Price Nafoveme=3 i: the Philippines 1955-68 We axe now in a position to put our model to work in explaining the actual histor7 of real wage move=eats in the Philippines. As 0= cant-tion is that these can be e=lained 4n terms of relative commodit7 price movements, we need to see first hov the do=estic relative ortces of our three classes of goods - importables, e=portablas and aca-traded goods have behaved over the last =o decades. Table A-25 provides the necessar7. series compiled by the Central Bank. These are charted qn. Chart 7, which also shows the index for the exchange rate. Chart 71 , charts the Canz--al Bank index Csee Table 26) for the real wage of unskill-led labor as well as that for qage earte= (which for the reazons g1ve= in Chapter I are not !J_%ally to be too u=evresentative of the real wage =ends in the ecor-o=y), From, our fta- Leworkz, we -would expect the reall wage changes to be ezplalmed ty t:.= com1bired effects of the changes in the relative price of importables. to non-t=aded and exportables to -a=-t=aded cor=ndities. For this pvrpose we need a composite -index which tells us the net effects of the movements in the two sets of traded goods. to non-traded good relative prices. This -means that we require a weighted average of these two price series. In our theoretical framework, we had iden=ffied importables as beiag the capital intensive -=Ufact,=ir_g sectar, and the =.ortables as the lanct intensi:ve agricultural and resource intensive mining sector. If: we then Assign relative weights to the importAbles to aon-traded (p d /P ) and ewportables to ncra-traded (p d /P I series equal to the Ti 'a "X u relative proportions of manufacturing and agricultural c= quarying's value added in the sum,-of the value added in marrufact-uring, agriculture Table 42; C0MOSIT R=TIME 2RICE.MD REAL WAGE INDICES'1956-78. Yean ...åw 1956 87 113.4 1957 88 110.3 1 - 3.1 1958 93 112.2 1.9 1959 105 107.9 12 - 4.3 1960 101. 108..8 - 4 0..9 1961 103 105.9 2 2.9 1962 115 105.6 12'- 0..3 1963 122. 98..6 7 - 7.0 1964 112 102.7 . - 10 4..1 1965 111 104.8 - 1 2.1 1966 106. 109.4 - 5 4,6 1967 108 108.9 2 0..5 1968 115 107.0 7 - 1.9 1969 113 109.3 - 2 2.3 1970 117 102.7 4 - 66 1971 108 96.9 - 9 - 5.8 197Z 100 97.0 - 8 0.1 1973 105 86.7 5 -10..3 1974. 113 71.3 8 -15.4 1975. 103. 73.8 - 10 2.5 1976. 98 79.8 -.5 6..0 1977» 106'* 77.4 . 8 - 2.4 1978 108 75.2 2 - 2.2 Source: Derived from Tables as described in the Tet. - 105 - Table 42: Continued: REGRESSION RESULTS Durbin Dependent Variable Coefficient of Adjulted Watson Period Variable Constant Independent Varlble R Statistic ** 1956-65 W 143.870 -0.3554 0.8490 2.7130 (0.0495) 1957-78 AW -1.366 -0.3883* 0.2355 1.2870 (0.1421) Notes: W: Wages P: Relative Prices AW: Change in wage from previous year. AP: Change in relative prices from previous year. Figures in brackets represent standard errors of the coefficients. * Significant at 5% level. ** Significant at 1% level. RcelaVr VrIce Indes (1972 100) 4 60.00 76,27 92,54 100.01 12i.0 0 14 t36 ----------†- ---------- - ---† 1956 1,1956 1957 1957 195EI 5 h958 1959 5 1959 1960 l 1960 1961 l1961 1962 1962 193 1963 19641 1964 19635 1965 196 211966 19,67 l 196 1960 196 1 14 196~9 1969O) I i70 l1970 1971 l 11971 1972 1972 197 1 1973 1974 l)11974 1975 Ä 1975 1976 1976 1977 l 1977 1971 L4 . 1978 141.36 . 125.08 108.81 92,54 761.276,0 4- 8ýj93a1Ta - 107 - and quz4-g we f--nd =1hat on aeaeb-t-WEen -1966-71, the ' eight for the importablas/traded goods serias would be 0.34, and that for the exportable/non traded good series would be 0.66. Using these weights we have derived a composite relative price of importables and exportables to non-traded goods series CP) which is given in column (1) of Table 42. For the wage series, inspection of the alternative Central Bank series showed, that from 1956 to 1965, the one year lagged, unskilled labor series seemed to correlate (negatively) fairly well with our relative price series. From 1965 to 1969, the three series shown in Chart VI seem to show divergent trends. We have decided to take the wage earners series as representing this subsequent period as it does not seem to reflect the effects of the minimum wage increase in the late 1960s, and whose effects are unlikely to have raised the economy wide real wage to the extent shown by the unskilled wage series. This series is taken unlagged. 1976 was the last available year for which data for this series was available. For the last two years we have, faut mieux had to splice the unskilled labor series, unlagged back on again. Our resulting composite real wage series Cw) is given in the column 2 of Table 42. In Chart : VII we have charted our composite relative commodity price series and the inverse of the composite real wage series, as our hypothesis is that the two should be inversely related, given the theoretical argyments of the previous section. Inspection of the chart will show that except for 1970-71, and 1957-58, there is (as we would expect) a remarkable resemblance in the short term trends of the two series, Indices (1972-'100) 30.00 7 .75 119.49 164 24 208.98 253.73 1956 1 1957 1 1950 *~ 1959 l 960 l0 1961 1 1 1962 l 1963 f 1964 j 1965 * 1966 * 1969 l 0 1970 1 R 00 1971 o 1972 l 1973 54 197-1' 1975 f 1976 l 1977 l 1976 l †--- - ---- ---- -- - - ----- - - - - - - - - --+ 30.00 - 7),4fi5 119.49 164,24 20ß .98 243.7*3 Indicea (1972-100) 30.00 73B 117.46 161.19 204.92 248.64 1957 l ( 1950 -1 0 1959 1 gsta 1940 1 1961 l II i 1962 f 1943 1964 l 10 n 1966 r OK 1967 l å 196ty-t rtt rrt 1970l 1971 l 1972 i 1973 l 1974 l 19745 1977 1970 l -1 30. 073717.16 16 0 ,- 116 - 110 - The results of simle reSressions with the orice series as the independent and wag series as the dependent variables are reported in Table 42.(3). These again tend to confirm our hypothesis that real wage movements in the PhIlIppines can be explained in tes of the relative .comodity price changes withi our simple three commodit7 model of an open economy. 5. Causes ol Relative Ccmmoditv ?rice Changes This leads us to enquire into the causes of thh relative commodity price changes, which. as we have shown are the likely cause of the observed i=iisering real wage trends in the Philippines.. Fron Char VI, it is evident that, there are two periods from about 1959 to - 64, and that from 1969 to 74, when there has been a marked decline in real wages. This decline moreover, has been associated with a rise in the relative prices of exportables and importables relative to those of nom-traded goods. We therefore need to see the factors which have caused these rises. Domestic prices of ixortables and exportables can rise relative to those of non traded goods, either if,ceterius paribus,their foreign. currency prices rise, or the exchange rate depreciates, or the level of tziffs and/or a#crt subsidies (i#licit and explicit) increases. From the series on exchange ' ates, the foreign and doestic c-rrency prices of importables and exportables, (given in Tables A.25-27)we can deduce which of these various factors were responsible for raising,the relative prices of one or the other (or both) of the two traded goods relative to non-traded goods during the 1956-78 periods. In Chart VII,"we chart Cae tread 4. the foreign currency prices of importable (p m) and the ratio of the domestic to foreign currency price of mportales (pm) In Chart VIII,we chart the ratios of the domestic to foreign currency price ratios of exportables and their foreign currency prices. Both charts also sh&of the exchange rate. - 111 - Till 1961, there was a mild rising crend in ct: foreign prices of importables and no clear trend in that of exportables. On the other hand, during this period which was one of import substitution Csee Power and Sicat (1971), Baldwin (1975)), the domestic prices of im=ortables rbse faster than their foreign price, and as the exchange rate was constant during the period, this relative rise in domestic importable prices, clearly reflects the high and rising levels of protection offered in the domestic market. Between 1961 and 1962-63, both the relative dcmestic to foreign currency prices of importables and exportables rose because of the 1960-61 devaluation of the peso. There then followed a policy of mild rises in foreign currency prices and no change in the exchange rate between 1961 to 1968. But during this period whilst there was relative stability in the relative domestic to foreign currency prices of exportablea, that for importables marginally declined.reflecting the limited import liberalization that took place during this period. The third period between 1969 and 1972, saw the relative domestic to foreign currency prices rising sharply because of the large devaluation that took palce in 1969. Between 1972 and 1974, the domestic prices of both importables and exportables rose steeply (though not as fast as their foreign currency prices). Between 1974 and 1976, domestic prices of the two tradeables rose faster than their corresponding foreign prices, largely because of the devaluation of 1974 to 1976. - 112 - During 1976 to 1978, there was some fZ1l in the n/, ratio mm implying some Ja-gial import liberalization,but by contrast there were conflicting trends in the exportable sector, with no clear conclusions to be drawn. It is apparent therefore, that it is the trade policy and associated exchange rate policies in the Philippines which have been the major determinant of the relative cm=odity price changes which have led to the declining real wage trends that have been observed. The distortions created by the import control regime in the Philippines are well known and have been analyzed in detail by Power and Sicat (1971), Baldwin (19751 and ILO (1974). They have imparted an ecessive capital intensity into Philippines manufacturing and they have been biased against-the growth of labor intensive manufactured exports, which have not grown sufficiently as a result to enable the diversification of exports required to prevent the declining terms of trade the Philippines has suffer.ed in the past. As the.above account suggests7their intensification in the pre 1960 period led to the real wage decline observed in that period, whilst their relative traduction in the mid 50s was associated with the relative real wage stability during this period. Since then there has not been any marked change in the degree of protection p,.ovided by the Philippines trade control system. Ceteris paribus, the real wage trends in the late 60's and 70's cannot be explained in terms of any intensification of these trade controls. They are,as we shall see,the result of macroeconomic and exchange rate policies. How does devaluation effect the story we have tried to tell of real wage trends within oLr 3 good 3 factor open economy model? We examine this question in the next Section. - -1- 3-- The World Bank LO Notes: NT is the full employment transfor=ation curve between tiaded and non traded goods. Intially, production is at point P , as is consum,tion. Z. being the highest attainable indifference curve wnich is tangentill to the transformat±on frontier. A P, the relative orice of traded to non traded goods is gven by the slope of JJ', Domestic e.penditure is OJ in ters of non traded goods, or O' n cars of traded goods. Åt ? there is both internal and e:ternal balance. OZ' traces out tae income- consumption curve for the relativa price rato JJ'. - 114 - 6. Macro Economic Policy, Exchange Races and Real 'ages In out-tieoretical model of Section 3, we had impiicrLy assumed that money wages were flexible, and that as a result, it was possible for real wages to fall, because of the fall in money wages (with the money domestic price of importables/exportables rising, and possibly with some fall in the non traded good price but less then in the money wage) induced by particular relative commodity price changes. But if money wages are perfectly flexible, then devaluation is redundant, except as an indirect way of contracting real . 1/ cash balances in the economy. To see this, and in order to provide a framew ork for understanding the springs of the real wage decline in the late 70s, we consider a slightly aggregated version of our earlier 3 good model. If the external ter- of trade between the two traded goods are constant and given a fixed exchange rate and trade taxes/subsidies, we can aggregate the importable and exportable into a composite"traded"goods The exchange rate, will then effect the domestic relative price of this traded good to that of non-traded goods. The ensuing model (well known to international trade theorists as the Salter C1959) model - see Corden (1977) for a lucid explanation of this model) can be-represented diagramatically in Figure IIIwhQse notes explain its mtchanics. We will use this model to consider some macro-economic and exchange rate issues of relevance in exploring real wage movements in the Philippines. From Chart V it is apparent that there have been 3 devaluations in the Philippines, one in 1961-62, another much larger one between 1969 and 1972 and a smaller one between 1974 and 1976. All three devaluations were in response to emerging or extant balance of payments deficits. The latter in 1/ This is the essence of the monetarist, view of the effects of devaluation. See Johnson and Frenkel (1976), Corden (1977), Lal (1979). - 115 - turn, as is well known from the absorption approach to the balance of payments(see Johnson (1958), Corden (1977)) imply that domestic absorption is greater than domestic output. The 1969 devaluation in the Philippines was the result of an increase in domestic absorption caused by an expansionary monetary and fiscal policy designed to finance election spending. We now trace the effects of this on real wages within the framework of the two good Salter model, on two alternative assumptions about money wages. The initial impact of the exogenous rise in spending and hence excess demand will raise the price of non-traded goods, and lead to a balance of payments deficit, indicating an excess demand for.traded goods. In Figurelil,the economy was initially at a point of equilibrium F Cwhich was also the consumption point), with money expenditure in terms of traded goods given by OJ, where JJ' is-the initial domestic relative price of traded to non-traded goods Cat the initial exchange rate). Money expenditure (absorption) then rises, which raises the relative price of non-traded goods to GG'. As a result, there will be some shift in production towards non-traded goods (for P to F) and a switch in consumption towards the (now relatively cheaper) traded goods. The excess demand for the latter being met by running a balance of payments deficit, or what amounts to the same thing exchanging the excess real money balances (caused by the initial demand expansion) for "foreign" goods (both in terms of increased domestic use of iports and e-portables). The new 'equilibrium' with a balance of trade deficit is show-n by the production point P, and consumption point C1. 1/ With an unchanging exchange rate and trade restrictions, the domestic money prices of traded goods are "fixed" by 'border' prices; however, the' money price of non-traded goods is determined by domestic demand and supply of these goods. With an overall increase in expenditure, there will be some extra demand for the nontraded good, which will raise its price until the demand for the good equals its supply. - 116 - Ncw, to restore internal and external balance in this economy some combination Qo policies wnicn induce a swicchigo expenicue y from traded to non-traded goods, as well as expenditure reduction is required. For suppose that maintaining the exchange rate fixed, the government just deflates. The economy will then move down the income cnnsumption curve OZ (as the domestic relativeprice of traded to non-traded goods is still given by II' = GG'). As production at this relative price is still at P1, balance of payments equilibrium will only be established when real expenditure (at the relative price given by GG') in terms of the non-traded good has been reduced along OZ to OK. But this will entail an excess supply, P1C2 of the non traded good, and if money wages are rigid downwards, and there is no exchange rate change, this will entail domestic unemDloyment. But what if money wages are flexible, as we had maintained in o.ur. earlier theoretical model. In that case the unemployment emerging at C2, will lead to a downward pressure on money wages, which will (as ex hypothesi non tradeables, are the most labor intensive) also lower the relative price of non-traded goods, Suppose this fall in the money wage and lowering of the non-traded good price is sufficient to yield the original traded non- traded good price JJ', With the same real expenditure the economy will then have moved to consumption point C3 (which will entail a small balance of payments surplus, and a reduction in unemployment, as a result of some expansion in the demand for the non-traded good), With the fall in the money price of non-traded goods (no change in the money prices of traded goods - which with an unchanged exchange rate, are still fixed by border prices), the overall price level will tend to fall. This will tend to raise real cash balances (as compared with the positidn at C3) which in turn will tend to raise domestic ea~tOs anBd nldex 01972-100) 25i0( -- 3,31 102.97 122.29 141,61 -45. 00 6 1956 1957 I 195 tt 1959 1960 I 1961 1962 1963 1964 1974 1965 19 6. CA I iU 19660 1970 1971 1972 II~ - 1973 IOI 19745 1976 1977 I 19701 -- - 118 - absorption, moving the economy to a point such as D, If the government now raises money expenditure (and hence absorption),back to the old level (at the initial relative price of traded to non-traded goods), that is OJ, the economy will be back in its original 'real' equilibrium. What would have happened is that,temporarily it would have absorbed more goods and services than it produced, by using a trade deficit which it would finance by running down reserves; or in short it would have converted some of its foreign assets into current absorption. What would have happened to real wages in this process. Initially, (again using the same logic as our 3 good model), as the relative price of the most labor intensive non-traded good rose, inducing production shifts towards it, the real wage would rise, but then as the economy worked its way through the process described above it would fall back again to its original level. The temporary rise in the real wage being, the ezact mirror image of the conversion of foreign assets into increased domestic absorption that this sequence of events entails. It is important, therefore, to determine whether there is two way money wage flexibility in the Philippines economy. For if there were, at least in principle, any trade deficit which. was "cured" by a suitable disabsorption policy would not entail any fall in real wages. There is evidence of some (not absolute) downward rigidity of many wages (see Chart IX) for the Philippirs., it-w would this alter our storyt We now consider a trade deficit, whizh the ,vernment seeks to cure by a devaluation with a given level of money expanditure. Suppose that, as a result of a balance of payments deficit, (as in 1969) the government devalues. - 119 - We =.. ass=e that money waaes are qiven. and cousider the real and monetary effects of che devaluation in successive steps. The rise in the domestic prices of traded goods will for the reasons given earlier, raise the prices of the factors specific to these industries, viz., capital and land. With money wages given, this must mean that the money price of non-traded goods too will rise (as this price is the weighted average of the costs of labor, land and capital), but as capital and labor are not used as intensively as labor (whose money price remains constant) the rise in the price of non-traded goods will not be as great as that of tradeables, and hence some switching effect will remain. But now, the money prices of all 3 goods will have risen, as will the general price level, and once again we have a fall in the real wage. The rise in the general price level, will moreover, (for any given and unchanged level of the money supply) reduce real cash balances in the economy which will lead to a reduction in domestic absorption. Given a large enough devaluation, the resulting inflationary reduction of cash balances could therefore be sufficient to yield both the disabsorption (expenditure reduction) and the expenditure switching that curing the initial trade deficit requires. In the process, however, the resultant effect on the real wage could be extremely serious, because of the large initial non traded to traded good price change that may be required to restore internal and external balance, by essentially shifting income for wages to non-wage incomes through a"profit"inflation. 1/ That, an attempt to cure a balance of payments deficit caused by excess demand, entirely through devaluatiqn has this effect, is clear if it is assumed that savings propensities out of non-wage incomes are higher than out of wage incomes. A policy which shifts income avay-from wage earners will then restore balance of payments equilibrium essentially by reducing absorption. - 120 - £ao.LeII L: SI~i IN -L .7 1A~ % 2AYME MIS INIAO-S 19`70-1977 (Million Pesos) 1970 1971 1972 1973. 1974. 1975 1976 1977 (A) Foreign Assets (net) -580 - 813 125 4795 6648 2801 2803 1335 Domestic Credit 12814 14314 16505 18646 26146 34342 42533 48769 Money (seasonally 4136 4814 6227 7021 8720 10015 11735 13394 adjusted) Quastioney 4691 5314 5402 6754 7765 8935 12950 15905 (B) Government Net Cash Transaction -386 - 38 - 361 -2470 -3137 -262 - 635 211 (fillion Pesos) (C) Balance of Payments (in million dollars) Balance of Trade - 48 - 2 7 474 - 207 - 923 1105 - 546 Long Term Capital 130 - 9 115 132 227 517 1137 661 Short Term Capital 112 251 168 80 640 596 58 332 Total 46 97 182 668 590 4 -56 367 Source: Bautista, "The Balance of Payments Adjustment Process in the Philippines", U,P. School of Economics, Dec. 1977. - 121 - This in effect is what happened in the Philippines in 1969. The deficit was caused by a monetary expansion to finaice excessive election spending. The cute would have been deflation coupled with a relatively mild devaluation which would have reduced real wages but not necessarily below the level they were at before the real wage rise which took place when the excessive spending first raised non-traded good prices. The government instead chose to cure the deficit, almost entirely though a massive devaluation. (See Table 43 which gives data on various monetary and fiscal aggregates for 1960 to 1977). The 1972-74 episode can be similarly analyzed. During this period, there was a massive rise in foreign currency prices of all traded goods. The government kept the exchange rate constant, which meant that the domestic relative price consequences were exactly equivalent to another massive devaluation (with roughly no marked change in monetary aggregates at least till 1973). Once again as in the case analyzed above, there was a profit inflation, a large rise in the prices of all commodities, but with some switching caking place as the domestic prices of non-traded goods rose relatively less, and with a contraction in real cash balances, and corresponding balance of payments surplus and a massive rise in foreign exchange reserves. In effect through its constant exchange rate policy during this period the government imported world inflation into the Philippines. The correct policy stance would have been some appreciation of the exchange rate to insulate che economy from rising world prices. This would have avoided the trade surplus and rise in foreign exchange reserves, as well as the real wage decline, and the accompanying profit inflation. - 122 - The third devaluation was again a respc-se to a osei trade deficit, caused this time by declining terms of trade but the devaluation was relatively mild and was accompanied by some reduction in monetary expansion; as a result the real wage fall was fairly mild. This suggests that the real wage trends that are a legitimate cause of concern in the Philippines are,besides the capital intensive bias imparted by trade controls, largely the result of inappropriate monetary and exchange rate policies, rather, than any malfunctioning of labor markets, or inadequate overall rates of growth of output or employment. - 123 - TECFL CAL APPNDiCES TO CHAPTER 11 I. Real Wages and Biased Growth A formal e=pression for the heuristic stateents in the te=t can be readily derived following NadrI (1968), and Williamson (1971), Assing a CES production function, with constant returns to scala as L L*t a K*( ......(1) where , represent the rata of labor and capital augmenting tachnical progress respectivel7, K(t) and L(t) are the physical stocks of capital and labor curently utiltized to produce crrent output Y* (.t) wIlst exLt L*(t) and e irepresent"efficency labor" and "efficiency capital" stocks e *(t)rersn"af andT' is the elasticity of factor substitution. Noting that iz equilibriu the economy (in this neo-classical world) will equate the factor price ratio Z =r/w, (where is the rental or profit rate and w is the wage rate) to the marginal rate of subsritution between the two factors, namely St) / f (t) -r(t)/ w(t) 2 z .....(2) we can by substitucng for fk (t)f (c) from (1) in (2) derive a Labor'deand equacion in growth ter=s (ignoring adjust=ent dynmics): L -rz + ( -1) - + K (3) (See WIlliamson op.cit p.17 for the derivat±on). Following Tilliason, if we further define the degree of bias against labor in, technical progress 3(t) as the difference in rhe rate of change in =arginal productivities of capital and labor (which corresponds to Hicksian classifications of technical progress), we have -. .. ... (4) - 124 - Substituting (4) in (3) and rearranging then yields: z = ( L -K + TBCt) )/o" ....(5) In the Philippines, we observe an increase in Z3Lhe r/w ratio over tiMe, and from the observed rise in the capital labor ratio, we have L<K, which must mean that with 7 4. 1, B(t) >0, if Z is to be positive, or in other words capital using technical progress strongly biased against labor. II. Real Wages and Relative Commodity Price Changes in an Open Economy Consider a 3 good (non-traded N, importable M and exportable -X) and three factors (labor L - capital - K and land G) open economy, in which domestic prices of the traded goods (X, M) are fixed by world (border) prices (pr p in foreign currency) and the given exchange rate (e) as well as any given tariffs (G) on importables and subsidies (s) on exportables. - All 3 industries use labor (L) and capital (K) in production, but unlike X and N which also uses land, importables do not use any land. The production relations in the economy can then be summarized as aLMw + aKMr = pm .(1) a w+ a ' + a =p. (iX,N) Li KI G4o where assuming competitive factor markets, w, r and g are the uniform wage, profit and.rental (land) rates in the various industries. Totally, differentiating (1) and denoting by x* dx, that is the percentage change in the relevant variable, and by 9 ij = aij.pi/pj, that is the relative share of factor i in industry j, we have: W* + 0 r* = p * L-M K11 m ....(2) W. * + r* + g* = p (i=X,N) Li Ki Gi i - 125 - where use has been made. of the cost-minaizing condia ~a_~- a -a i i i Ki Gi Gi Solving for w* in (2) and using Cramers rule we have wa = 1611/fI (3) with the two determinants given by:. 9L_* ey'M 0 LA G-,- & r- We now postulate that the factor intensities in the various industries are as follows: a /a ,a /Ia a /a n'M LM KX LX KT LN .....(4) a /a a /a and a /a G a /a GX LX' GN LN KN GN KX GX which says, in terms of labor intensity the importables are the least labor intensive, the non-traded goods the most., Exports have higher land/man but lower capital to land ration than non traded goods. So that in effect, importables are intensive in the use of capital, exportables in the use of land relative to the three factors, and non-trader goods in the use of labor, relative to the other factors. Given these ratings of factor intensities, it is easy to check that, 191 is positive. Hence sign w* = sign I 1 - sign p 9 1)* + Ip* - P* KF TX N M m rl K , wtere jGtG = negative (as given our factor intensity N M. N &assumTtions Y /GN/ G We can now consider various cases with alternative changes in relative comodity prices. - 126 - (1) uppe as a of a devaluaticn the domestic of N or in other words p falls with p the= fro (5) we have that w* is negative,. and as. fr= (1) we know that the price of' the non-traded good (pm) is a- weighted average of the three factor prices, the fall in the price of pn, must be less than the fall in the wage rata ( w*> p*), and hence ft e 1/ with. p . - 0, the real wage must fall,- and tht real ptofit. rate· rise, (the- rental. om land will also rise',) (2) Suppose there is a change, say an increase in protection (or an exogenous increase in foreign currency import prices with a. fl=ed. exchange rate- e) . This will raise the relative * -price p, and. will be equivalent to rising (positive) p, 3. * with the other pB unchanged (p* =p 0). Then. frtm (3) this will lower W (w* will be negative); with all other product. prices unchanged, this will again unnhigiously reduce the :raal wage. / It should be noted that in all these cases, the changes in the other factor prices, g* and r* are also readily derived bt solving (2) for g* and r*. Thus r* and g* l i , where, tum ?M4 Given our factor intansity assumptions it can be readily shown that, sign g* - sign e3 - sign p*m (-ive) + p* (÷ive) + p* (-ive ) term term N term sign n* S: 82 sign p* (+ive ) + p*(+ive ) +* (-ive) 24 term x term N term With u* '* 0 and p* negative, from 5(a) we have g* positive and r* positive, so that the weightad auerage of the three facter prives which makes up the costs of production of the non-traåed good will not fall as much as the ona component that has fallen, viz, wage costa, - 127 - Conversely if pm is negative Cche degree of proceccion * * is reducedl, with p = p = 0, w* must be positive, and the real wage will rise. (3) Suppose there is an increase in export subsidization (or equivalently a rise in foreign currency export prices with a given exchange rate and level of export subsidies), f so that p.,, e(l+s)p , rises, that is p* is positive, but with p* p = 0, then again from (5), we have a negative w* m ' which will unambigiously lower the real wage. :128 - 7V. POLICY ISSUES 1. Long-Term EmDlovment and Wage Issues There has been much debate about what constitutes the "employment 1/ problem!' in developing countries. There appears to be some consensus that employment as such cannot be considered to be a sensible objective, but is rather a means of providing output and incomes. In this context it is useful to distinguish between what maybe called the long run "employment related" problems concerred with inter-temporal resource allocation, and those concerning short-run disequilibria (see the Technical Appendix to this chapter). (a) An Inter-temDorally Consistent Current Poverty Line Within an inter-temporal social welfare framework, the optimum structure of output and incomes, with given tastes, technology and political constraints, is provided by the solution to the problem of the optimal inter- temporal allocation of resources. Hence for an economy operating efficiently within these constraints, employment problems and policies (in both what Sen (1975). has termed their 'production' and 'income' aspects) are ultimately just part of the general problem of allocating resources optimally. The long term employment problem then depends upon first delineating the feasi- bility frontier for the economy between present and future consumption, and hence between present and future employment levels. Next some social value judgments are required to choose the optimum poiht in the inevitable conflict 1/ This section is based on Lal Q978a), which provides a fuller treatment of these issues. - 129 - between growth (which. will determine future consumution) and current emplo-ment (which will be determined by the choice of the current level of consum.tion). These choices (if made consistently) will deter.e various nationalpara- meters that are required for project appraisal (see Little-.ir-les (1974)?. Squire-van der Tak ( 1915) Lal (,19L74)). As part of this long term perspec- tive problem, these national parameter estimates will be determined by the date when on the best assu=ption about ecommic performance, and given the economy's feasibility frontier, the economy will find savings (and hence future emloyment) and consumtion (and hence current e ployment) equally valuable. This date is estimated (see v, (1974) as the date by uhen the proportion of the labor force employed in. urban industry is fairly constant. For then, additional industrial investment will not (ideally) result in extra aeployment per se, but rather to increases in capital per worker, and hence there would be little reason to give any further extra weight to the creation of industrial employment and the future "consumption" that entails. This date T, moreover, can be approximated by making projections of the date by which the proportion of the labor force in manufacturing is expected to be the same as in currmyent developed countries. The latter proportion -as roughly 30% (see Lal (19771). The Industrial Sector mission has estimated that, a feasible grLwth rate for industrial employment in the Philippines between 1977-85 is about 5.9%, which if realized would mean that 15% of total em.loyment in 1985 would be in the industrial sector. Lorimer (1966) has made some estimates of the expected labor force in 1985 and 1990 on alternative assumptions about changes in mortality and Lertility rates, Taking his most optimistic estimate, which assumes a mode- rately declining mortality and sharply declining fertility rate,. the labor - 130 - force is expected to grow at a comrn,'d rate of 2.77% p.a. between 1985 and 1990. Assuming that this remains the rate of growth of the labor force till the early part of the next century, and assuming that the expected rate of growth of industrial employment in the post 1985 period also continues to be 5.9% p.a., we get the year 2018 as the date when roughly 30% of the Philippine labor force will be in industrial employment, and the 'employment' problem in its long run perspective planning aspect would have ended,- that is roughly a period of 30 years. This was also the rough guess at this date T, which was made by the author when making estimates of shadow prices for the Philippines (see Lal (1978)N. Given that,we can use the estimate given therein for the value of the current premium on savings (S) for a mildly egalitarian social welfare function (see Lal (1977)) with a value of the elasticity of social marginal utility (e) of 2, that this estimate of T (and the estimates made in Lal (1978) of the accounting and consumption rates of interest) entails. The value of S, for e = 2, and T = 30 is estimated to be 4. This has important implications. For this value of S in turn will determine the level of the 1/ The computations are fairly straightforward. Let Lt be the labor force in year t, E that employed in industry and T be the date from 1985 when ET = 0.3LT. Then as we know that E1985 = 0.15L1985 , and that ET E1985(1.059)T and LT = L1985(l.0277)T, we have by simple substitutitution that T is given by the solution to 2 = (1.059/1.0277)T (1.03046)T, which yields a value of T = 23. - 131 - so called "critical consumprion level," or "base level income" (see Little- Mirlees ( 1974), Squire-van der Tak (1975), Lal (1974 )) at which3given the technological, political and structural constraints (including those on public revenue) the economy faces, income/consumption transfers will be socially as valuable as investment or public income. In other words it provides us with an inter-temporally consistent poverty line. Those below this line will then constitute the target groups for current poverty redressal. To obtain this base level of income or critical consumption level, (b), we can derive a formula, from the following highly simpli- fied dual economy model (see Little-Mirrlees (1974)). Suppose that as a result of a marginal investment project in the industrial sector, there is a marginal increase in employment, which leads (by a chain of substitution to.a net increase in consumption of "poor workers" (valued at accounting prices) of AC. This is the resource cost (in terms of investment/savings foregone) which results from a marginal increase in employment generated con- sumption. Given our social welfare function of the form V(Y) = (be/l1-eJY where Y is the consumption per head of the relevant income group, so that the marginal distribution weI;ght is W 7= (b /Y)e, 1 y the social value of the consumption change is simply (assuming it is marginal) l' 1 W AC .a, where AC is the change in consumption per head at market prices and y n are the numbers wh ose consumption has increased. Then ,as by definition, 1/S is the social value of the extra employment generated consumption per unit of savings, we have 1 5 = AC/W .,dC . . . (2) - 132 - ,rom (1) and (2), this means, that the inter-temporally consistent poverty level is given by solving for b, from (b/y)- = AC/S.AC . (3) In Lal (1978), we have provided estimates of AC, and AC1, for an industrial worker's household whose daily wage was 10 pesos/day in 1973. Using a value of e - 2, and S = 4, we have the total change in consumption at accounting prices AC = 4.88 pesos. For the change at market prices,roughly speaking, assuming an average household size of 5, we have per capita con- sumption at market prices rising from 4/5 to 2 pesos. Using our valuation function we then have from (2) 4 = 4.88/(b)2 [5/4-1/2J.5 or b2 = 0.325 and hence b = 0.57 This yields a daily household income level corresponding to the value of b (in 1973 pesos) of 0.57 x 5 = 2.85 per day which can be related to the daily earnings of industrial workers in 1973 of roughly 10 pesos. This means that roughly, the interr-temporally consistent poverty line for the Philippines shouid be fixed at (2.85/10) 0.30 of the industrial wage. If our argument is accepted, then,the poverty line relevand for designing various poverty redressing projects will. not be the nutritional or any other arbitrarily chosen poverty line but this inter-temporally con- sistent poverty line which should be set at a household income level roughly 1/3 of that of industrial workers. 2. Short Term Disequilibria and Employment Policies The other aspects of the employment problem,which we distinguished at the start as caused by short run disequilibria,next need to be identified. - 133 - In terms of the framework set out in the T-chnical A--i o chapter, these are concerned with the existence of various "distortions" which are not part of the economy's. feasibility constraints, and hence which can and should be corrected. These "distortions" place the economy inside its feasibility frontier, and their removaL would increase both employment (current consuption) and growth (future consu=ption). In previous chapters we have tried to look fairly carefully at the functioning of ?hilippine labor markets to assess whether there are any serious distortions in the labor market which need to be corrected. We have not found much evidence of such distortions. (i) Minimum Waze Legislation There is one policy debate which is still alive and that concerns the past, current and future role of minimu wage legislation. An effective .nians wage above the supply price of labor, would effectively be a tax on the levels and grawth of employment. In the Philippines in the past, however, except perhaps for a brief period in the late 60's (see ILO (1974)), minimum wages have normally been set at levels lower than the -dsting money wages in the economy. Thus "from 1951 to 1978 average money wages have consistently increased and exceeded the legal minimum throughout the whole period" (Fidelino (1978), p. 5). At a time of a marked real wage decline it maybe tempting to try and counteract this by trying to enforce a minimum wage. For the reasons given above this will not be a cure but a treatment of the smptoms which could worsen the disease As we have argued, the causes of the real wage decline at a time of relatively rapid employment growth are to be found in - 134 - the relative commodity price changes (and the resulting profit inflation) which has been generated by sub-optimal trada, exchange rate atid macro- economic policies. It is the reform of these policies (discussed later in this chapter) which will do more for the real incomes of workers than any attempt to raise real wages through fiat by raising and enforcing minimum wages. (ii) Soecial Emoloyment Programs There are a number of special employment programs in the Philippines. Their size and overall impact is fairly limited. The major program under the Rural Workers Office is the so-called social amelioration for sugar workers. This uses a levy on the sugar industry to provide a fund which makes loans and cash grants to sugar workers. As a means of redistributing income, something might be said for this fund, but it is doubtful if it has an obvious "employment" impact. Nor, did it seem from our field study of this program, that,the distributional benefits of such programs necessarily go to the poorest either in the sugar industry or in rural areas. The danger with this and other special so-called employment programs is that they they are based on the assumption that labor markets are segmented, such that an overall expansion in the demand for labor will not seep through to particular occupational and industrial groups. We haye found little evidence for this view. This means that the aim of public polizy to provide employment must be related to removing identifiable dis- tortions in the working of factor or commodity markets. (iii) Rural Infra-Structure and the Choice of Techniques One obvious area in which there are distortions which work against labor'use is in the choice of techniques in rural infra-structure, - 135 - In an earlier study (Lal (1978)), and ILO (19740), it was shown that efficient labor intensive technologies (in particular for rural roads) were feasible. It was also argued that there were various institutional biases which continued to further the use of capital intensive road building techniques, even though in most cases these were not socially profitable, and in som cases not even privately profitable. Despite the relatively large expansion in the provision of rural infra-structure, no attempt seems to have been made by the Bureau 'of Public-Highways to-either remoye the - - instittonal-biases prompting capitar intensity, nor to more directly legislate the use of labor intensive techniques. As much of these choices of technique are determined by the government, this is clearly an area where some definite policy changes maybe called for. (iv) Promotion Ot Small-Scale Industry and Off-Farm Emlovment Since 1974, the government has started a program to promte small- scale enterprises (SSE) in order to both promote industrial employment and the regional dispersal of industry. The major component of this program has been the provision of institutional credit. Khambatta and Anderson (1979) estimate that about V800 million has been lent since 1974 to 5,000 enterprises, three quarters of which are outside the Metro-Manila area. The credit constraints for SSE appear to be fairly severe,both because of the Central Bank administered interest rate structure for the banking sector, as well as the higher transactions costs (in ters of both judging the quality of borrowers and their projects) involved in lending to small, dispersed and often unknown enterprises. The ceilings on interest 1/ This section is based on Khambatta and Anderson (1979). - 136 - ~---tes 4---osed on '-anh lendi-'17 '--t7 Cntzal 3a-- affact-'vely =aan tlnar, th~e bankzs cn. ratior. czzd:L- to th-air brz r3 Thynatuzall--rfe to lend short term at close to the controlled interest rates (which have roughly been at about 9% per annum in real terms and thus below the accounting rate of interest of 12% in the Philippines estimated in Lal (1978)1.They prefer to lend to the large organised sector firms who are their prime borrowers, as well as to some SSE's with proven track records. The government provides institutional credit to SSE's through two main channels. The first is by channeling money through private credit institutions via a Central Bank rediscounting facility, the Industrial Guarantee Loan Fund (IGLF), and the other is through direct lending by the Development Bank of the Philippines (DBP) and the private development banks. The aim it appears is "to act as a catalyst for private sector involvement" (Khambatta and Anderson, op.cit.). This aim is laudable, for in lending to SSE's there is likely to be a definite divergence between private and social risks and hence costs It is well-known that under conditions of uncertainty, if risks can be pooled and spread over the economy, then a case can be made for the government to act in a risk-neutral manner, even though private individuals and institu- tions will naturally have a positive degree of risk aversion (see Arrow and Lind ( 1970)). This does not mean that the government ignores the uncertain prospects (in the case of lending to SSE's, this would be the risk of default), only that whereas it should base itself entirely on the expected returns from such lending, private institutions would add a further discount to the returns because of their private risk aversion. An implicit or explicit subsidy to private institutional lending, which brings the volume and pattern - 137 - ~; ~A-~, ~~ ~ ~(bv 1-Ter-1-cr their effective private degree of risk aversion to the lower social one) is then called for. To that extent the channeling of effectively subsidised credit to private institutions (or its direct provision through the DBP and PDB's) is justified. However, the effectiveness, optimum size and distributional effects of the program are vitiated by the Central Bank's policy of administering interest rates (both for depositors and borrowers) to keep them below a market clearing level. This means that the inevitable excess demand for credit in the economy 'which is thus'generated, has to be met by some form of credit rationing. In this rationing (and given the diver- gence between the degrees of private and social risk aversion), it is in- evitable that many privately risky but socially profitable investment projects (particularly in the SSE sector) will not be able to obtain credit. Moreover, by effectively lowering the cost of capital below its true social opportunity cost to enterprises, it favors the choice of relatively more capital intensive techniques and industries. A bias which is further accentuated if as is likely the more capital intensive enterprises are also the larger and (financially) better known ones. Even within the SSE sector, this policy of maintaining interest rate ceilings and effe-:ively rationing credit by administrative fiat rather than price favors the bigger against the unknown borrowers. Thus from our interviews it appeared that the main beneficiaries of the SSE program have been ex-landlords and retired civil servants. In our view, therefore, a major reform for promoting SSE's, as well as employment in general in the economy is to remove the existing interest rate ceilings and - 138 - the resultant "financial repression" (see McKinnon (1973)) that causes. The other -j4o prbe faced b7 5Ss~ ccnc= a a!c appronriate management and marketing skills. A number of programs are designed to provide training to sall scale enterpreneurs, in such basic sk4ll' as double entry book-keeping. There is also an imaginative proposal for instituting some form of management contracts with SSE's which would allow (in particular second generation family) SSE's to continue to grow. Further public efforts in this broad area of 'training' and SSE management skill development would thus also seem to be called for. Much of the emloyment in SSE's is in household industries (about 9G0 thousand out of a. total eloyment of 1.7 million in 1975 as estimated by Miambatta and Anderson (1979)), but there has been virtually uo growth in e=loymant in this sector. This household industrial employment is part of the large amount of off-farm emloyment to be found in the Philippines, and which we surveyed in Chapter I. Much of this emloyment is complemen- cary with agricultural output (either by supplying inputs into agricultural processes, or else the comdities to meet consimption out of rising rural incomas).(see TLO (1974)). Moreover, as we had noted in Chapter 2, the activities w vd f -to--thei-ategor o-itaa t7 E are a taleot-ocurri Furthe=ore, there is no marked specialization in any of these activities by particular segnents of the labor force, so that there are no clearly identi.fiable purely "off-farm" workers. Any special programs to reach such target group would therefore be mis conceived. Given the complementarity between which provide a stimulus to agricultural growth will also induce growth of off-farm output and employment. Besides these household enterprises, the so-called cottage industry sector also comprises establishments with less than 20 workers. Employment 1/ Another reform would be to use rates of return evaluated at shadow prices, as the effective rationing device for credit, until the distortions in the capital market are removed. -139- in these has been estimated to have grown by about 6% p.a. between 1967-75 (Khambatta and Anderson, op.cit.). Their problems and prospects would seem to be the same as the other larger, but nevertheless SSE's,and what has been said above about promoting SSE's in general would also apply to them. (v) Reform of the Trade Control System One of the major sources of policy induced distortions in the working of the Philippine economy, which has vitiated against.the economy having as much employment and real output growth as it could, has been the high and uneven system of protective tariffs and other trade controls, which lead to a continuing bias against labor intensive techniques and industries in the economy (see Baldwin (1975), ILO (C-974), Power and Sicat (1975), Industrial Policy Mission (1979)). Their reform, remains as it has since the mid 60's one of the single most important reforms for the better health of the Philippine economy. Apart from the boost to employment that such trade liberalisation would entail, it would also ceteris paribus (for the reasons given in the last chapter) lead to a stemming (and possibly a reversal) of the adverse real wage trends observed in the Philippines during the last two decades. The ideal methods of trade liberalisation are by now well known. A previously announced phased program of tariff-reform over a period of say 5 years, could take either of two forms, both of which can be shown to be unequivocally welfare improving (see Dixit (1975), Hatta (1977), Lloyd (1974) Corden (1974)). The first step on both programs would be to convert any existing quotas (implicit or explicit) into equivalent tariffs (so that as a result of this change there would be no difference in the divergence between domestic and border prices of these goods). .The next step could be - 140 - either a phased cut in tariffs across the broad, till eventually they are reduced to zero. This program would give the inefficient protected indus- tries both a signal, as well as time to adjust. The alternative program would be to follow the so-called "concertina method' (Corden (1974), p. 369), whereby the high effective tariffs are first reduced to mediumilavles, then these and existing medium tariffs are reduced to a lower stage and so on, until eventually all tariffs have been removed. (vi) Macro Economic and Exchange Rate Policy We have argued in the last chapter, that the adverse real wage movements (which appear to be the most surprising and disturbing feature of the past labor market performance in the Philippines) are (at least in the 70's) largely the result of inappropriate macro-economic and exchange rate policies. On macro-economic policy little more can be said the-n that it is vitally important not to let excess demand appear in the economy. As, given the relative factor intensities of trade and non-traded goods in the Philippines, such excess demand leads (t1rough its balance of payments and exchange rate effects) to relative commodity price changes which are likely, (as they have in the past) to generate a profit inflation. The consequent damage to the welfare of wage earners, and thereby to the numbers in poverty can be very serious. It is imperative therefore that fiscal and monetary - policy are used with caution, and no attempt is made at Keynesian type pump- prf-ing, as the Philippines is not clearly nc (and is unlikely in the near future) to be suffering from any Keynesian type unemployment problems. -141 Given that internal balance will thus be maintained by the correct monetary cum fiscal policy, what exchange rate policy should the Philippines follow9 Though controversial,our view is that there is a very strong case (probably for most, but certainly) for small open economies to allow genuine free floating of their exchange rates 1/ (see Lal (1979)). This would entail a removal of all exchange controls and the development of full fledged forward exchange mark ts. There 2/ are two major reasons for our advocacy of genuine free floati2ng- The first is a fairly conventional reason, namely that if an economy is open and most of the "exogenous" shocks (in terms of sifts: in demand and supply curves and the consequent relative commodity price changes) it suffers from are foreign in origin, then a floating rate (as apposed to a fixed rate) will tend to insulate the domestic economy from these exogenous shocks. Secondly, though in principle the above reason would merely entail 'managed' floating, in practice a completely free float is likely to be better because of problems connected with irreducible uncertainty - namely the problem of trying to foretell an inherently unknowable future. For a 'managed" float to be appropriate implies that, the government knows with relative certainty what the appropriate moving 1/ Except if thought necessary on the export of long term capital, but as is well known it is in practice impossible to distinguish between short and long term flows, and it may be best to allow complete freedom of capital movements. 2/ Only a sketch of the arguments can be given here. Further details of the argument and rebuttals of counter arguments will be found in Lal (1979). - 142 - exchange rate should be in the face of changing but continual exogenous shocks. There is no way in which it can make these predictions better than most other participants in the economy. However, if it commits itself and the economy to a particular exchange rate policy, in the face of irreducible uncertainty, and its guess turns out to be wrong, then it could impose fairly high costs on the economy, as does seem to have happened in the 1970's. By contrast, in a genuinely freely floating rate system, there would firstly be no need to worry about balance of payment equilibrium, as this would be instantaneously secured. Secondly, the movements in the exchange rate would depend upon the decentralized guesses of the future of the numerous economic agents in the economy. The government might still wish to participate in.the foreign exchange market, but like any other speculator the mark of its success would be if its speculation was profitable for the Central Bank. This may appear to be a rather radical suggestion, but elsewhere we have provided greater elaboration of its benefits, as well as answers to the various objections that have been raised against such a policy in the past (see Lal (1979)). Certainly, if the experience of the Philippines in the 1970's is anything to go by, a strong case can be made for suggesting that a genuinely floating rate would have done better in terms of both maintaining external and internal balance as well as in preventing the type of real wage (and hence distributional) trends that have been observed. - 143 - The clearest case is of the rise in foreign currency prices in 1972-74, when the gover-ent by keeping the exchange rate constant, effectively devalued (in terms of relative domestic prices), generating another profit inflation (and an accompanying real wage delcine), along with a large balance of payments surplus. Suppose instead that in 1972, the peso had been genuinely floated (that is the freeing of the exchange rate had been accompanied by allowing complete capital mobility), what would have been the conse- quencesZ Assume for simplictty that, the government had kept the nominal money supply constant and that the only other asset was a bond freely traded in competitive world markets at an interest rate 'given' to the Philippines and that the supply of these bonds was also constant. The rise in foreign currency prices would then initially have led to a contraction of real cash balances, which residents would try to replenish by coverting their bonds into foreign money (which they can do as ex hypothesi there is effectively A fixed world price at which these can be traded), as well as goods into foreign money. The net effect would be an excess supply of domestic goods which will tend to put the balance of payments into surplus, thus putting upward pressure on the exchange rate. The rise in the exchange rate will reduce the domestic currency prices of the traded goods, thereby lowering the price level and hence restoring real cash balances to their original levels. Nothing real would have changed in the economy, the exchange rate would be higher, but the economy would have been insula.ted against the exogenous "foreign" shock. 1 i44- Similarly with a floating rate, and on the same line of argument, with the emergence of e:cess damand in 1969, if a policy of a genuinely free float and some reduction of excess demand had been followed, though some depreciation might still have been required to enable the "switching" of expenditure necessary to improve the balance of payments, the depreciation that would have occurred would probably have been lower than actually observed, as would have been the consequent decline in real wages. In our view therefore serious consideration should be given to instituting a freely floating exchange rate for the peso. If this is combined with trade liberalization, interest rate reform, and some special training programs as well as the removals of biases in.technological choice in rural infrastructural deyelopment, there is no reason g crrent rates of growth of output, why labor demand should not continue to rise faster than labor supply, thereby leading to rising real -~-wagres, _ _ Technical An;A--- f-. Ch-,t! --Ournut Consumnpion 2 E.mploymenz The above diagra (fro= Marglin) illustrates the relationship between growh ant employmeit and. tha i=portance of distinguishing between ' poss±bility' and eoai24IT' fntier- - here the, lattr tincI- vA~ o!l s '"olitical' 'or st-rctural' constraints. For simplicity we look at a one zood. economv with a given initial. capital stock (K ), and, labour force OLX. in che left. hand quadrant of Fig. 1, OY is the resulting neo-classical production function which shows current output as dependent oanly on the labour utilized (given the fixed current capital stock.K ). If the goverent has complete control over the economy, and can legislale both the wage-rata and the Investment- constmption mix for the economy, the it should clearly naxJxize current out- put and employmenz (given by Y and L respectively). If the labour force (L*) is smaller than the level at which the marginal producc of Labour (with given K ) falls to zero, this optimal policy will also yield full employment. More- over the resulting frontier between currenr- consumption and investent can be depicted by T T in the right hand quadranc of. Fig. 1. Clearly, the slope of of T will oe 11 Next, suppose the goverment, whilst still being able to choose whatever consumption-savings b2lance it wishes, is nevertheless constrained to . .. . .... -14o- pay a fixed wage of W for labour. The maximum amount of employment (and output) that can then be provided is OL1, and the corresponding 'constrained consumotion-investment frontier will be T T , but which will still have a slope of -1 (as ex-hypothesi, the government can choose whatever consumption- investment mix it desires). 'We constrain the situation further, by assuming that in addition to paying a fixed wage-rate, the government cannot directly control the savings-consumption balance in the economy, which is now determined by the share of wages (assumed for simlicit7 to be all consumed) and profits (assumed to be all saved) in total output. Thus if OL are employed with the current capital stock K , total output is LY , of which C L has to be paid in wages and will be consumed, and the remaider Y C wily ge saved and invested (T,P -Y C ). As drawn it can be seen tha' 8L will yield the 2 00 0 maximum level or investment that is attainable, and P will represent the corresponding consumption-investment mix in the economy. As employment is increased, the feasibility frontier between consumption and investment will be of the T P shape (which will lie within T T ). The efficient feasibility frontier (between consumption and investment for the economy subject to the above two constraints wil thus be T P (it will not be efficient to be on the OP section of the frontier that is to have employment less than OLo as this reduces both consum-tion and investment). This structural cum- politically constrained feasibility frontier clearly will lie within the 'unconstrained' feasibility frontier T T , and the 'structurally constrained' frontier T,,T,. The optimal level of employment and growth.will then be de- termined bF the relative social valuation of consumption and investment, which will determine the optimal point on the PT2 feasibility frontier. Finally the economy may' not be operating efficiently on its ce- strained feasibility frontier. It may be at a point such as Y in employment- output space, and the corresponding point 7, (in consumption-investment space), which is within the feasibility frontier T,P. Clearly policies which -put the economy on this frontier could achieve bot more consumption and invest=ent (or employment and output). - 147 - Abarientoa, ., et al.; Impact of Techinology and Sma! Farners and :heir iazilis: an eight-year e:erianca in the Fa=w Record-Rei Project 1962-1970. 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Lorimer (1966): "Analysis and Projections of the Population of the Philippines", in First Conference on Population 1965, (Quezon City, University of the Philippines Press, 1966). M. Manghas et. al. (1976): Tenants, Lesse'es, Owners: Welfare Implications of Tenure Change (Institute of Philippine Culture and Institute of Economic Development and Research, Quezon City, 1976). M. Zzghs a. (.97) : asu~..z ?~z:~ Ca21C-=a=, (:'velcD ant Ca ,=Lay 01 Ch 71-ns, ;6 S. Marglin (1976): Value and Fr±ce in the Labour St.=71s Eccnomy (Oxford, 1976). R. McKinnon CL973): Mone7 and Economic Development (Brookings,, 1973). M1. Nadiri (1968): "The Effects of Relative Prices and Capacit7 on the Demand for Labour in the U.S. Manufacturing Sector", Review of Economic Studies, July 1968. J. ?. Power and G. P. Sicat-(1971): The PhiliDoines - Industrialisation and Trade Policies (Oxford University Press, 1971). L. L. Sta. Romana (1975): A Study of Prose-itvand Entrenrenneurial Income in the PhiliAines, 1956-71 (M. A. Thesis, University of the Philippines, School of Economics, March 1975). T. K. Ruprecht (1966): "Thilippine Labour Statistics: A Critique and Recomputation of PSSE Data", Philippine Statistician, Vol. IV, Nos.. 1 and 2, May-June 1966. V. W. Ruttan (1966): "Tanure and Productivity of Philippine rice- Producing Farms", The Philitine Economic Journal, No. 1, 1966, A. K., Sen (1975* EmploMent, Technology and Develoment. (0mord, 1975). W.E.G. Salter (1959): "Internal and External Balance: The Role of Price and Expenditure Effects", The Economic Record, August 1959. L. Squire and E. van der Tak (1975): Economic Analysis of Projects (Johns Hopkins 19.75 ). W. F. Stolper and P. A. Samuelson (1941): "Protection and Real Wages" Review of Economic Studies, Vol. 9, 1941. A. Takahashi (1970): Land and Peasants in Central Luzon: Socio-Economic Structure of a Philivnine Village (Honolulu, East-West Centre Press, 1970). R. L. Tidalgo (1975): Wages and the Wage Structure in the Philippines, 1957 to 1969 (Ph. D. Thesis, University of Wisconsin, 1975. (1976): "Labour Absorption in the Philippines, 1956-75" The Philippine Economic Journal, No. 30, Vol.XV. Nos. 1 & 2, 1976. & G. M. Jurado (1978): "The Informal Services Sector in the Greater Manila Area, 1976", Pbiliopine Reviev of Business and Economics, March 1978. - 15u - C. Umana (1967): "Growth of Output of Philippine Manufacturing: 1902-60" in R. W. Hooley and R. Barker (ed.): Growth of Output in the Philippines (University of the Philippines, School of Economics, and IRRI, 1967). J. G. Williamson (1971): "Capital Accumulation, Labor Saving and Labor Absorption Once More", Quarterly Journal of Economics, February 1971. K. C. Zachariah and E. 1. Pernia: "Migration in the Philippines with Particular Reference to Less Developed Regions in the Philippines", mimeo, IBRD, September 1975. - 151 - STATISTICAL APPENDIX 'I - 152 - STATISTICAL APPENDIX List of Tables A.1. Employed Workers Working Less Than 40 Hours and Wanting Additional Work, and Their Full Time Unemployment Equivalent A.2. Employment and Output by Industry, 1956-1977 A.3. Number of Employed Persons by Major Industry Group in Urban and Rural Areas of Philippines 1965-1976 A.4. Percent Distribution of Employed Persons by Major Industry Group, Sex, Urban and Rural in the Philippines, 1965-1976 A.5. Employment-Output Elasticity Coefficients A.6. Sectoral Employment and Net Employment Generation in Household and Factory Sectors by Major Industry Group. 1960-1975. A.7. Ratio of Value-Added, Employment, Payrolls and Gross Profits and Overheads, and Fixed Capital in Manufacturing, 1956-74 A.8. Percent Distribution of Underemployed Persons in Total Employed in Rural and Urban Areas A.9. Percent Distribution of Employed Persons Working 40 Hours or More Per Week in Agriculture and, Non-Agriculture by Class of Worker, During the Survey Week in the Philippines: 1965-1976 A.10.. Philippines - Agricultural Real Wage Index 1957/58 Till 1977/78 A.11. Regional Wage Rates and Price Indices A.12. Average Real Daily Wage Rates of Workers by Occupation Group and by Industry in Manila and Suburbs: 1956-1977 A.13. Average Weekly Earnings of Employed Wage and Salary Workers in Private and Government Employment by Major Industry Group in the Philippines, 1969-1976 A.14. Consumer Price Indices for the Philippines, Manila, Areas Outside Manila A.15. Average Weekly Earnings of Selected Occupations by Industry in Metro Manila: 1973 and 1976 - 153 - A.16. Average Tgeeklv Earnings of Selected Occupations by Area i- Philippines: 1973 and 1976 A.17. Per Capita National Income and Personal Consumption: 1954-1977 A.18. Income and Expenditures From the FIES, 1957-1975 A.19. Compensation of Employers and Factor Shares, 1971-1978 A.20. Percentage of Families, Rural and Urban, in Receipt of Income from Spec±f±ed Sources, 1961-71 A.21. Percentage Distribution of Families, Rural and Urban, by Main Source of Income, 1961-71. A.22. Sources and Average Levels of Income (1975) per Rural Eousehold in Pesos (Western Visayas) . A.23. Percentages of Annual Income per rural hQuseoldderived from own Farm, Off-Farm Agricultural and Ott-Farm non-Agricultural Occupations (Western VisaVas A.24. Average Weekly Earnings of Employed Wage and Salary Earners by Occupation Group, 1969-1976 A.25. Wholesale Price Indices of Exportable, Imported and Locally Produced Commodities in Manila, and Exchange Rate Index for Philippines A.26. Price Indices of Domestic and Foreign Currency Prices of Importables A.27. Price Indices of Domestic and Foreign Currency Prices of Exportables A.28. Agricultural Wages and Index of Money Wages of Unskilled Labor, 1956-1978 - 154 - Table A. 1: rSLUIED ;WR=s WüGR'G LZ33 TyS 40 CLåS AYD WANTING aDDITIONAL WORK A,nUD FULL-2 E-v0 0=LO.NT EQUIVLN No. (000) Workers Working No. of Full-Time hrs. and Wanting Additional Work Unemployed Year Under 20 20-29 30-39 Equivalent hrs. hrs.. hrs. (1) (2) (3) (4) Oct.. 1956 285 578 1/ 216 556.8 May 1957 139. 611 ./ 187 456.5 Oct., 1961 258 367 553 515.3 April 1962 297 361 477 522.5 May 1963 377 492. 716, 707.8 May 1964 273 374 579 536.5. May- 1965 457 366 518 655.3 May 1966 330 340 447 529.3 May 1967 n.a. =.a. n.a., =.Z. Yay 1968 493 590 614 818.3 Kay 1969 277 379 400 497.3 May 1970 nV.a. n.a.. n.a. n.a. May 1971 193 301. 301 370.5 May 1972 177 303 39L 382.0 Yay 1973 228 304. 291 395.8 May 1974 167 305 361 368.0 Aug. 1975 170 325 382 385.5 Aug. 1996 166 332 332 373.5 a/ These data are for those working between 20 to 35 hours per week. b/ These data are for those working 35 to 40 hours per week. c_ This has been derived b7 assuming that the average hours worked. by those under 20 hrs, i4 10, and hence 3/4 of the are full time (40 hours) equivalent unemployed; for the 20-29 hours group, the average assumed is 20, and hence 1/2 of the group is full-time equivaleut une=- ployed, whilst for the 30-39 hours group, the average hours assumed at work are 30, hence 1/4 of them are considered full-time equivalen= unemployed. Source: NCSO; Labor Force Surveys, various dates. !т 2a6ie л..'.: �BLO^`s_"tT цФ 0{,псгrТ 3� ::"DU5i7.': .Э=6 _°L' :477 лi - - r.c+_. - � „ . 2!1д?а¢ Ь Zlectrlcir�, Gав � �спес ' '_еяг _aduetr7 .4gr!с�lпге Т.ддцее^г Эат'+1ces Quar^rlпg �аацгаесцгiаg Ccaяc:vec.on ana �асег =¢aasoose ::ое3егсе _arvues а�� г�) !Э1 (4У �51 f6) (7) {9) (9) (10) � С11) '_955 7DZ мSи3 L217 19Э7 ?1 962 298 26 228 80Э 908 l957 dL94 4Э97 1277 1927 27 ьС03 Z29 13 --- . 223 785 919 - .95В 3Э29' S276 i133 1924 ц 927 I6I 24 J8 74Э 448 ц I959 3575 5298 2Z'3� 2D19 Э3 992 Z10 21 230 811 959 1960 8539 3г14 1316 1949 29 1036 231 20 271 753 475 19Ы 4345 3618 I4Z9 ?348 ЭВ 1118 ц4 19 319 89Э 1176 196г %а0 3415 i392 2з74 г9 lонь 23г 29 зЭ7 934 1094 t453 10655 Ь цд 1702 26Э3 ЭЗ 12Н8 Э4Э J8 Э71 10947 12Э4 1964 10220 ЬОб�ь I401 2755 Э1 1209 34I 20 Э26 1176 105Э l965 10343 5032 I370 2921 28 1221 299 22 367 1120 1426 L%6 1Z032 5275 1707 Э050 28 I33L 32Э 23 Э87 1197 1465 19б7 1ц85 :993 1921 '+Э72 S2 IJ89 747 ЭЗ Э83 i352 :6ЭЭ 196д 12481 ;242 LH38 3441 46 '_Э87 Э"г8 27 :80 :Э79 16д4 ;9б4 1'1Э3 5Э23 17Z0 3240 51 1291 Э'�9 29 39Э :104 1'о?6 L°70 1Э338 5100 1д7б sЭ82 З1 1]54 иЭ8 :3 -96 Э38 2045 1971 12'�9 546б 1993 4267 57�� 2427 � 57 504 1379 2194 1472 i2598 b744 I820 Э984 56 I3I9 �2 43 504 1497 1484 2Э7Э I3896 7592 145б дЭ48 50 143Э 402 41 542 1351 2153 2Э74 IЭббо 7547 1g73 424b 42 1383' - 411 Э5 • 326 1.47 ?172 1975 14317 7768 ц07 4342 :4 26iY 4S6 46 492 1523 2429 1976• ц627 8126 21ТЭ 5028 5Ь 1680 491 лб 53D 1В64 2614 197Т 14463 7046 ц 93 534б 91 1837 593 72 ;04 1951 2791 (з) аrлг �чпsцг цl ' х�a3,ц� ,;, 3lвепiс'_с7, С+• Ocher уеаг .:цдесвегу Agrienlcцrв i.зdns¢7 3вrэlw �аsг'TiaY ?iваи:+ешг�гg Сап.асrаесlоа апд +асет ':raaяnart Ca.�aree Sesvicee (1) (2) (Э) (4) (3) (6} (7) (8) (9) (10) (t1) i L936 2Т.СО 3..0 5.44• � 9.50 0.31. 3.70 t.1H 0.'_3 0.7а 5.30 Э.20 L937 24.20 д.+Л 3.3ti' 10.00 0.Э3 3.90 2.3� 0. ц 0.82 5.а0 Э.40 19Sд ц.20 9.40 3.90 10,4П O.J3 4.30 1.i6' 0.16 D.36 6.J0 J.50 I9!9 25.90 3.�+0 6.+0 11.00 0.Э9 4,60 1.24 0.17 ' 0.90 6.40 7.70 1950 27.20 9.Э0 b.�э0 � 1L50 0.1Т 4,i0 1.08 0.17 0.95 6.50 Э.90 ;561 '.Н.30 9.9д 5.70 23.00 0 J6 4,�0 1.21.' 0:?Т 1.00 o.9+J 4.10 I962 29.30 10.30 6.90 I2.50 �.Эб 3.20 1.19 0.17 1.04 i.30 4.?,0 196Э 31.о0 11.00 Т.30 U.20 0.Э8 5.30 1.+8 0.17 1.10 7.50 +.50 2964 Э2.50 ц.00 7.90 13.20 J.38 3.70 1.53 0.17 1.15 7.Э0 4.30 1963 34.:0 21.30 3.Э0 14.J0 " 0.40 3.9Q L 31 0.19 1.11 3.10 i.�0 ?убб Э3.50 12.2Я 3.70 t4.80 0.43 6.30 1.71 0.19 L.27 д.4Q 5.i0 1467 37.30 12.30 4,40 ц,о0 С.30 6.90 1.32 0.20 1.Э4 9.J0 5.:0 1968 39.Б0 13.40 9.90 26.� О.ЬО 7.Э0 1.оЭ 0.2Э 1.41 9.]0 5.50 1969 G1,20• ?3.30 10..]0 17.20 0.69 7.60 1.7+ О..Э 1.G8 Э.70 5.00 L970 42.50 Lй.00 10.60 18.10 0,92 д.00 1.34 ,•0.2б 1.37 i0.i0 5.:� � го�т 44.?0 14.+0 11.20 1д.о0 J.Э4 Э.70 1.65 д.29 !.57 :0.:0 5.50 :372 �о JO 13.С0 12.:0 i9 JO 1.il2 Э.30 1,9Э 0.30 :.i5 i0.o� �.'i0 :97з �9.30 13.?0 :з.бо 2е.о0 1.�6 10.I0 ?.J8 о.з2 ?.:а 1z.z0 ,.5� 1974 5L 50 13.40 14.1D 21.30 1.04 10.30 2.:0 0..72 2.0Э 11.70 7.Э9 1975 55.00 15.Э0 13.20 22.90 L 03 10.70 Э.08 0.Э7 2.15 21.Э0 8.+0 1476 S4.Э0 18.J0 17.10 24.4D 1.12 11.40 4.23 , 0.+4 2.45 13.2D 3.70 1977 53,I0 19.20 1д.+'ь0 23.30 1.2б 12.20 4.39 0.32 2.3° 17.60 4,Э0 5аигса: !ear�ook of 1.а�ог 5tae*_веiы игlоця рввгя вад :Iве+_ооаl lacow Acceuaci дац. { t - �6 - � ,�a��i '�• - 7 о• е е 3ит�.ачт; � ' _ цТ`*9!"�. Оё :'ЗL� ?3350N5 >У :п�Оfl 1.;шiiSl�f �rГiCP :i ^ti?.;+{ 3;7 S_zI. _�..i.-i5 С_ 5t i:a5 • i97o �._оиsаад_а �ага} .,.д _aous�ccs, .ig^с11с_тс, ?orsчcry, V�1ag Б ?:аавасгг, 3toragв 7ссевсгс . С�гг _' �са_•_г 4"�'���s `.!пzекасtгп Саааtгцег'_оп Со¢тtтса� n г.� ;сас'оа iгглсье 1acusc_`г5 --- �IIPAL v !isт 1963 5,343 673 162 5Z2 14й� ц7 Э11 7,527 � 19бS 3,:Srь 76Э 194 • 57D Lц7 1Э5 ЭЗг+ 7,Э96 ;1я7 19б7 b,4б0 80l 19Т. 682 Iг+2 1Ь3 Э77 8,754 Упт 1968 6,567 i84 14Z 655 1Э0 I63 382 8,879 �_rг 196Э 5,185 733- 19Ь 503 ц0 202 396 7,Э68 `!:у L970 5,538 144 ц9 Э19 200. 1/ 7I9 7,i60 дпs� i971 5,6У7 835 ?АЗ 7Э7 25б 197 546 8,472 Ai:; I972 6,475 7I7 :02 619 21S 171 468 3,371 � i973 7,197 738 183 5ЭЗ Z4д 193 527 9,141 - ьng 197LL 7,087 64Э 142 577 238 145 503 9,+37. Aag L973 7,.7�0 900 2ц h37 2:5 198 550 10,t77Э .1ug 1976 7,570 941 252 i27 2+г' _48 5Э1 i0,b4d t OABAN ;!ry ;465 507 :68' �7 598 2'_3 Э18 657 3,016 !!аТ 196б 521 � 589 I33 б27 2J7 цьд 674 Э,цб � :Say i967 593 638 155 Ь70 � 2:.3 Э99 7Z4 3,426 '`_�ty 1468 635 650 186. 7z4 :50. 341а 814 Э,д02 :lау 1969 54U 609: цб 507 ?3З Э26 796 3,Z57 упq rg70 5�.2. 66I :19� 520 248 1/ �,�58 9,598 дцg 1971 Э49 659� 20Т. 841 247 4.:8 1,07А 3,136 ц1g '_972 3I9 637 207: д78 285• �53 932 3,12В , аид 1973 Э9б 7sk и{ 918 _� 550 1,o2s 4,155 �цg I974 4� 77дь �_1] 971 288 546 1,014 4,2Э2 ' �8 1973 +17 S04 242 986 286 585 1,'_42 +,гь'+rь лиg ?976 <+5б 79S 223 1,i36 ЭО3 584 L,27S L,779 1 t 1�1�д :п or�er L�дгцг_'iвr. atttrca: 9G`0 $� of пшиsrЪяIда тд 1970 �враlаСаа Сваги�. ' - ° � с i � - . . 1 ' � - �- . � '�. с С С G F Г С h 1+� Ч� Ч� а+С G I�- G'S {'; [С u 11- 'У `К'С '[ 'С '< 'С уΡ v- 4- '"?- L`ьС К't К С [ . 1 t19 %� � R � b ы G io М} �• ' F� F М b b b+ k Е! рΡ p � а� t+ `в9! � b�1 G Ь и. д w Uo w JO W W`-0 ^4 `4 �4 `д 'д иа йь Р� w W w ц ц V`С 'д V � Ja � W U9 09 ц V ц`д ц�4 QV J] � и0 n9 и9 ц V✓ И'4 р о. t1 1`• i 1 rr•г-�'�•�'r°rl�rrrr- ь--!•!-'r��•r-м•r!-!'i�!- t-r•rь�l..�..����Е.•~•��1^ r�•ь_�.�✓1..а..l..�.. rь� [т п W �] .льлво О л Uалш 1л шц1 алИ !л аи17411л •Obwtл ш ц]ал ш W алш ШшШ b л О О1л lu tOw 11] 4l Ш W Ш аГ1 �алш f1 V✓�7 �1 •-! •J J�А �. О. о+ Оь П• �1 --1 `-! V Ч V~1 ГЛ Q. tЛ О• tT �1 �1 ч J J 1 V О. д. О. ГЛ U J�1 V J J ! V О. О1 Q. О. О. м �` 1•' Ч Uв и L� W 1) 1� О.О Ф�! О. и Ф l� л` и N У О Ш Ф�! О. и О. и�• и �.1 N О W Ф�! И и Оа и F W 1� 1� Q а0 Ф�! О• lM r в< 3• '1. 0. П1 " й д. � 1 О !л �� и V " � о �, � � � ('т • i1 �-l Ф Г1 !1 И� !-• F-• 1•• У•' 1�' `•.! 4J 'Ч v V О. v V�! V�! Ч L1 W W l.1 W Гl W W L� Н W lJ fT О' U. lT о. \л аЛ U. о. О� о. U. Гt 1± lJ о иwоиl,lwСлrn�lЧо.ав юиииwо,!-•иь wwu иричгюwчrошФ r+wсwиФнпиааит i- н п, r� . . . . . . . . . . . . . . . . . . . . . . . . . . . r . . . . • . . ♦ г! � д и г�л и ци и�-' Ч о. 1.1 rn w G с� N ш[> и и и U 1� �+ ч ш а fN д N ь ш rл �, д с�ч k�' ч 1� ь` а� �А Н F Ф а, и N И г. ы � ю R t ' Еи 1 л 1 [„ Р 1� {.ь'1 1i {]' ь� Ф ❑ 1� ° � .. 1i х рН, , и р А �• � вв1 Р. , 1 (� 1.а . Г" 1л . G О 'б J {� К iЭ ц k^' У 1-` F+ F-' 1"• F•' 1�' W 1� 1-' 1-' - Н и�� Ч!� N f-' F• Н 1-' 1"• У �• р 1с о. Ф А Ф v v оа т т ои ао ш и Ф у v оо ю ш ш Ф ш w и � • г Ф 1� V т оа оfи и ш.р т и и s.t т ш ои т.л рп ы у 'ai -дG ..��-•L,1�. о.•о•РVОт�ОN ии F WН W о.W Фl�vУ чV Оо W tлlл W vvГдF�'N i`4.и Ь 1-�М-ииИцвА1 Г1 W гi fp- 1 � и ^ Г. м с; io ai К ` р � iiй. А • 1` K � � 1 [ � � р 'г С; F`ии ии.и О. 4�и L� Р м �� 1J t.1NУ N NN NN NN�� I� , рΡ ц �� fj 1' н1 Ои ь а•J 4ч а- с` L� Ф!и и N И И F-• О ш W W W Р 1J N} � О О 6 О'J ю О М О О[р О �� 4 F F 4` 4� и tл А Р L� jл А �!. 1 и�� 1 i . � ��F•ы1�и, t.,д.0'.,N7W Н Itlл1 w�lа•wиа`ми�чиу.,f+ n �lf1 1• 11 11 С: lаь ' 1•- 11 и `1 о 11 rI в h 1 . • ' h{ �Wь • . i) л �' ы и 1.. 1> t+ r �-• г„ t�- N r и 1� 1- г- й N� r п! 1� гА r 13 J �i и ю ��> �.! !а л т о и.о ш и а, т а. Ч Ф п л v v-+ о, о ш и ал F-' 1а т о о о т �! �! �! v+{ Ф г и о, и а. т 1з + а+ 1 1.л i• �л �.` iл о. l-• оа о й т i,> ♦-' V1 о�Г N!.. i� ш j.a iл о о i.1 F` о, �., г� -ч б�� q io w г� а�` е� w ц ои iм о w iя ч п �.. м t'! . n го - 1`� , 1 �' : мн рΡ� 4' в � � {в (� 1ta• .�1 t •О 1' t rn о. о. •--, о. оо v и v v-и и Г✓ N N w w io r г� r r r о о о о о о о о о а л о и+ и и и и и>` г µ м v- Г. глf `'± t.. с> ш h' W и и Н•л h' о. .�- l� N W и и О и w i,. о. ал и иN и} W и Uв и У и и W F W ш�л V V w 1� ро о. �1 1� ш У• +! W 1в1 � : ге п 1ь. О 'J Й b 111 N i.i 'и !" С'i . и и и !- ь. г• 1• ь-+ г-+ г-' !л r. ь� r!� У- F• r 1� гс .. - иwi.,ulsь+'Уошь-'ь�-.о r1�Arиrl��rr.1�--rrи (a+aw� �iu'1,иш�оs' r�i.•r•t�'i-'r''1�л'rrrь-• 'у � . i-,�>�о�>г>.лч.оио.Г--и �,с>йошis��.тш�.li-• voinoлш�ioul-`vy j-oiэooo�NNN4+►' rL �. h ff [ь N {°. J и п ь'. ь' ° ,�i о� 1� 11 :� • s л1 г> 1 1 1� п. w w и го rti N 1-• r• r��.-• w N ь� r r 1-' r r п.'' й и и ь� и т�! г 1� W 1�} 1� <,1 и и и и ч.л и с• с• г. r` Р Р о. V Н W L� о Н N •л .л ш ш и N 1� и Ф т р> Ф 1' И -J -а .и ` ь N ш сл и о. N и Гл U. lд W А N О N fr D• и и w Ч 1� U 1J 1� и с� N v N О+ Ч+ 1�' сл F�• W 1� и о. Р F W 1> г. а '1 в1 1� I1 N fa и 1у Tiible A.5; P111LIPPINES; EMPLOYMENT-OUTPUT ELASTIGJ.TY C0EVFICIENTS 1956-61 1961-68 1968-72 1972-,74 1974-77 1956-68 1.968-77 1972-77 3,956-77 All. Industries 0.7629 0.8545 0.2452 0.8445 0.5065 0L8856** 0.5524** 0.5839'" 0.6895** Agriculture, forestry and fishlng 0.9130 0.555i -0.4380 1.9722 -0.1966 0.7116** 0.5444 0.1909 0.5484" Industry 0.6618 0.6962 0.1789 0.2932 1.0632 0.7738** 0.4945** 0.8346** -3 Services 0.6756 1.6752** 1.6751 0.6519 1.3674 1.3763 ** 0.8046 1.0160 *_* 1.111()8,k-l, Mining and quarrylng 0.6216 0.8474 0.5169 1.7399 3.4880 0.9022 0.5364 2.7376 0.6496 ManufacturIng 0.3636 0.6165** - 0.0148 0.3887 1.491.9 0.6392 0.5368 1.0377 Construction 0A662 0.6690 -0.4215 0.1599 0.4351 1.1354 0.3008 0.3944 o.7176 00 Electricity, gas & waler supply 0.0065 0.3439 2.1987 0.8412 0.7826 O.E833** -3.1801 1.0767 0.8007 Transport, conuDunica- tion & storage 1.3452** 0.51110* 1.ý942 0.3162 1.1159 1.0524 0.7227 0.6172 O.L6.15" Cownerce 0.3198 1.11658 ** 0.9420 0.3460 1.341.1 1.2620 1.3110 0.9470 1- Cl] 8 -Å Other services 0.7745* 1.4599 1.1666 0.7501 1.5568 1.1272 0.9335 1.1243 1.1407'* Significant at 5% level. SIgnificant at 1% level.. Source. These have been derj-7ed by fitting the function by E a + b -l-Qg Y to the data given in Table A.2, where E is eniploy-ment and Y is real output. � 7',�Lic А.Ь: yCG'РОНА1 iHk'l.OYГUi111' А)1N НLьТ W1{�IAYt11:1Г1' СЕNЕКл'ГТ011 j!! tWUSk'1WlA А1ц1 FAC'COUY SCCt'U1t3 11У НА]U!l 1U110S'С{tY CROEt►�y� ; (1п 000) __-, kma�weuC NeC lицьlаvт_:�г GencYa(lаьь lчсn 1970 __ tq7�plс 1вбо=70 1ч7о-7s {9ь0=7� �_ �- "- [nдивСту 11аtи<1ьо1д РисСиlу 'Гоtа; 1louaeiюlJ prcco�y Tota1 цоиаеlьоW yacCOry TqCy1 lцiиаацоlд Fвckory Yota1 lbиааlьоlд Faatory Sotq1 UоиыеЬоlд Fис1 ьту 'fс,ь ь1� иооа 00.4 61.s 1йi.я 30.7 ыs.и .;2з,э вь.s 111.т ряв.2 - 41.7 зз.; - 1в.2 а7.а зб.э 7y.s б.1 s1ь.з �,�..:1 ваwт.цаи зл.5 9,а 4s,7 10.т 1s.2 д3.4 хl.2 ьр,4 40.0 - зб.з б.0 - 20,З 10.0 9.7 14,6 ->IS.э �.7 - ,, тоа.ссо - 1з,г 1о�б - х2.б s1.o 1q,я 22.о �б.9 - ч.4 1о_а tй.9 - о.б ts,9 1й.ч 1,.н rь.., тааСllаУ в1,2 z4.ь 10s.ь lйы.ы и7.0 19s.7 12ы.1 еб.s s1s.o б7.б тз.у ы9.ч - 2о.7 зч.9 ;я.� йб.ч ьу.Э ►и,ь.:. СkЧСЫп8�}аоСисвr 205,9 ]0,0 2Э5.9 угз.g 40.2 S1Ч.1 3б7.2 42.2 405,4 26В.р 10,д 279.з -110.7 з.0 -1U8,7 157,Э У_�.2 1п�,.', Uuud 4.4 ;9.й 23.д 55.2 ЭВ_у 94.1 � 5В.4 4д,7 101.1 50_t! 19.� 7Q,� З.з l.B 7.0 54,0 2.7 l/,1 уитоlиьrа 1з.5 5.6 19.1 Z5,3 6.9 32.1 2В.4 11.5 э9.9 t1.ы }.З 13.1 а.д 4.6 7.8 1а.9 •.ч с�и.и ra{,.т - 4,б й.З - е.9 7.; s.з t2.1 21.а - 4.] 2.а 9.2 3.2 1й.З 9.2 ,.э 1г.п - PrtnU ng • - 12.1 и.з 2.э 16.0 1в,з п,7 1й.b s2.2 2.Э 3.9 10.о 1s.й - д.Ч �з_ч ь;.7 ..s �ь�.ч 1.етеlьег - 1.5 1.5 0.6 1.ь з,� у.5 2.9 6,7 р,б О.э О,е 3.9 0.5 а.у a.s и.и ,.е аиццат - д.о З.в - и,б s.7 ы.? ;з.0 2ь.б - �,б 1,9 в.7 4.4 t5,g ы.7 1ь.ц 1i..з С1ьатlсаi• - 12,7 б,е - 22,8 19.0 27.1 2д.8 55,9 - 1Q,) 12,2 27.1 6.0 Эб,9 27.1 1л.1 :r,.1 о11 хпд Соы1 - n.л. ) 1,6 'р,5 Э,1 4.7 1.у 6.0 1.б 1.5 ) Э.1 - 0.2 2,9 4.7 1,Э ) с 20.5 ) 5.7 I _и,�) 1 Noc1-Ncts}11с Hlыcrrls '12,3 0.2 ) 4,5 7В.б • 2Э.1 ;7,2 25.5 42.7 - 7,0 I0.4 ) 12-7 б.а 14.Т ' 4,9 1ь.3 ) 1 tleвtc Сlьтиlслlа - 3,5 )) 5.2 10,9 14.1 1Э,з 1Ь.б з9.7 L 2 7.4 ) 1U.0 5,7 15,Ь 13.2 1t.1 ) 27.Ь ) 111,0 ) q1.дj riсси П еrоЛисса ],7 1й.5 ) 2.6 16.2 18,(! 16.1 17.� Э7.9 i.1 7,7 ) 13.5 1.5 15,0 ;2.4 1.'t ) Non-Ciccrrlcal Кachinary 1.1 9.b 5.2 54.3 6.7 61.0 54.] 1з,0 бВ.Э 5].U 2.9 55.0 2.U 5 J ).i 55.0 ,ь.2 ьь.1 Lьlлeгricrl NrclьCncry - 7.S - 2d.i 17,5 41.6 25.1 14.3 4г1,4 28.1 Ь.д 41.6 - 3.0 5.8 2.tl з5.1 ]1.1ь 4',.. Ттпиритс Е�иlрте»С - 7.2 5.3 2В.Э 13.6 41_9 90,9 15.5 46,1 2U.3 Ь.Q Эб,б 52.5 1.7 54.д ВО_8 t.t �ль,U Сцlьеr � 172.д 4.Н 177.b 1tl.9 9.0 27.9 1А2.7 17.7 12U.4 -153.9 4,2 -149_7 8Э.9 д.7 92.5 - 7л.1 1г.ч - t�.2 L �'.rr.1 suu.g 14u.i1 ьэ7.э еыб.з йт.е � з1 96.0 1о@7•р 577,0 1ь1s.� �� 155,о й52.� v1 7,2 �� з� 5,8 95.о zь1�� �i,�.i 1ау lbuиcltalJ стрlоуаепг 1а Jerlved аи л ьеиtдЧдl Ье[иееn t1.e. foclury иесСот (flпаи ewplaying at lлва[ flve uorkera) аыJ [л и! wanufacCuring awpluywauC. - �G YocCUt'у иесСоr дата ta foe 1у74. ' ,[е 1л[ai ииlьlоуигсиС аа reported aLove Jilfe[u Uy 2В9,ЗВ2 иокkа[а Fruw С1ыьС puL1{л1ьсJ (а дьа flnal voluwa о1 Cha Yo�uia[1оп Сепаиа� 1975. 11ьс йсСиаl nuwhar of ио[korв т"cporteil ииt 1.Э1 u1171an, ыh1сЬ 1а lдиег Сlьеп СЬе 1.40 ш1)lLau rcported tn С1ьа )9?0 еsииив. А1ио, соиаlдсгвбlа Jlffercnce (а focwJ LeCUeeo сЬе 1975 елпыиs, eorraupund(ng Со а11 СЬа pravluccu, илиг Lecu lидерспJап[]у иддед ьt ttьe аее�игиl 1cva1, 11ьа[ СоСа1, l.62 аь1l1lоn иот'kart, !а proLab�y 1а 11аа uitЬ tho 1.68 r111(un иurkera CcpoCCcJ Гит 197б Ьу С1ьа Uc[aUer тлии,l о1 1ие CaLor Ecrce иUГчсу. „ j� 5ае fool»аСа L 1n Тыц1а 1]. Sиитсеи;. i7Ct:i0 FufnlaUon Ссnнии 1']00, 1'!7(1, 1Ч15 ы cJ Аииивl &uгvsy of flunufacCurar 19G0� 1y7U� 197y. 160 Table A. 7: RATIOS OF VALUE ADDED, LMPLOYIENT PAYROLLS AND GROSS PROFITS AYD OVERTHEADS AIM FIXED CAPIT-A-I , 2T HLNTFACTIT-IRING 1956-74. Ratio of Ratio of Gross Value Added Ratio of Ratio of Profits and to Fixed Payrolls to Fi:xed Assets Overheads b/ Year Assets Value Added to Employment to Fixed Assets (million pesos) per 1000 man years) Y/K W/Y K/L Tr/K 1956 1.23 0.32 4.05 0.84 1957 1.29 0.31 4.14 0.90 1958 1.35 0.28 4.64 0.97 1959 1.43 0.28 4.71 1.04 1960 1.40 0.27 5.08 1.02 1962 1.26 0.25 6.25 0.95 1963 1.22 0.23 7.50 0,94 1964 1.13 0.24 8.13 0.98 1965 0.98 0.27 9.07 0,72 1966 0.94 0.27 10.35 0.69 1968 1.03 0.24 11.04 0.78 1969 1.07 0.24 11.27 0.82 1970 0.96 0,20 14.25 0.76 1971 1.00 0.22 17.07 0.79 1973 1.05 0.19 19.87 0.85 1974 1.47 0.15 19.96 1.25 a/ Fixed Assets are at book values. Gross profits and overheads comprise value added minus payrolls, and Include some payments for services, as wall. as depreciation, interest and direct taxes an profits. Source: Annual Survey of Manufactures, NCSO. - 161 - Table A.8: PERCENT DISTRIBUTION OF UNDEREMPLOYED PERSONS IN TOTAL EMPLOYED IN RURAL AND URMAN AREAS (Eousehold data) Not Wanting With a Job Additional Underemployed Not at Work Work RURAL May 1965 70.0 26.6- 3.4 May 1966 74.0 22.9 3.1 May 1967 70.1 26.3 3.6 May 1968 68.8 28.4 2.7 May 1969 74.1 22.3 3.6 August 1971 82.0 15.6 2.3 August 1972 84.4 12.2 3.5 August 1973 82.8 14..9 2.2 August 1974 87.0 10.1 3.0 August 1975 84.3 13.2 2.5 August 1976 86.7 11.1 2.2 URAN May 1965 67.7 28.1 4.2 May 1966 71.6 23.4 5.0 May 1967 71.5 22.1 6.3 May 1968 71.9 22.3 5.7 May 1969 78.7 15.6 5.7 August 1971 85.2 12.5 2.3 August 1972 86.2 10.4 3.4 August 1973 85.8 11.3 2.9 August 1974 88.0 8.7 3.3 August 1975 83.7 13.5 2.9 August 1976 .88.2 9.5 2.3 PHILIPPINES May 1965 69.4 27.0 3.6 May 1966 73.3 23.0 3.7 May 1967 70.4 25.2 4.4 May 1968 69.8 26.6 3.6 May 1969 75.5 20.3 4.2 August 1971 83.0 14.7 2.3 August 1972 84.9 11.6 3.5 August 1973 83.7 13.9 2.4 August 1974 87,2 9.7 3.1 August 1975 84.1 13.3 2.6 August 1976 87.2 10.6 2.2 Source: NCSO Survey of households. - 162 - Table A.9: PERCENT DIST'RIBUTION OF =LOYED PERSONS WORKING 40 HOURS OR MORE PER WEEY IN AGRICULTUR AD NON-AGRICULTURE BY CLASS OF 4URKER DURING 2HE SURVEY EEK IN PILIPINES: 1965-1976 (Household Data) Employed Wage and Self-employed Unpaid at Work Salary Workers Workers I' Family Workers Agriculture May 1965 63.6 68.6 76.3 45.4 May 1966 69.1 72.6 83.8 52.5 May 1967 63.6 62.1 83.2 43.0 May 1968 60.7 62.4 79.2 41.3 May 1969 64.8 70.9 76.8 48.5 August 1971 69.0 76.4 79.6 50.2 August 1972 66.0 74.6 77.5 47.7 August 1973 69.9 72.8 81.3 55.2 August 1974 72.0 72,0 84.4 56.6 August 1975 68.6 71.7 80.5 52.2 August 1976 69.1 72.7 82.8 50.9 Non-Agriculture 2! May 1965 73.0 85.3 54.5 39.9 May, 1966 76.6 87.6 65.0 42.0 May 1967 75.7 87.8 63.1 37.6 May 1968 74.8 87.2 62.6 38.3 May 1969 76.5 86.5 62.0 49.3 August 1971 83.5 90.4 71.9 68.5 August 1972 83.3 91.9 71.3 55.6 August 1973 82.8 89.8 71.2 55.9 August 1974 85.5 91.2 75.2 66.1 August 1975 85.2 91.9 71.0 65.7 August 1976 84.5 92.3 69.8- 58.8 Philippines May 1965 67.5 81.4 69.5 44.8 May 1966 72.3 84.2 77.6 51.1 May 1967 68.6 80.7 . 76.7 . 42.2 May 1968 66.5 80.7 73.7 40.9 May 1969 69.8 83.3 72.2 48.6 August 1971 76.4 88.0 76.8 51.8 August 1972 74.0 88.2 75.5 4-.7 August 1973 75.7 86.6 78.2 55.2 August 1974 78.0 87.2 81.8 57.7 August 1975 76.2 87.9 77.6 53.8 August 1976 76.4 88.3 78.7 51.9 1/ Includes employers. 2/ Includes persons for whom no industry was reported. Source: NCSO Sur-vey of households. .0: Ü ""' '"" -- - A-IMT"TAL REAL WAGE RATE INDEX: 1957/58 - 1977/73 (1965 = 100. _ 1972 = 100.) Wage Rate at Consumer PrIce Index Real Waze. Rate Real WagE Race Index Year Cu=rent Frcas in Areas Outs:Lde ManIla 1965 1972 1965-100 1972-100 (Peses) 1965-100 1972-100 (Pesos) (Pesos) 1954-1955 2.64 72.2 41.4. 3.66 6.38 118.4 145.0 1955-1956 2.65. 71.6- 41.0 3.70 6.46 119.7' 146.8 1956-1957 2.64 73.6 42.2. 3.59 6.26 116.2 142.3 1957-1958 2.66 71.4 40.9 3.73 6.50 120.7 147.7 1958-1959 2.63 73.4 42.1 3.58 6.25. '115.9 142.0 1959-1960 2.66 71.9- 41.Z 3.70 6·.46 119.7 146.8 1960-1961 2.65 75.6 43'.3 3.51 &.12 113.6 139.1 1961-1962 2.65 79ý.6 45.6. 3.33 5.8:1 107.8 132.0 1962-1963 2.78 81.7 46.8 3.40' 5.94 1.10.0 135.0- 1963-1964 2.72 88.9 50-9- 3.06 5.34 99.0 121.4* 1964-1965. 2.76 96.8 55.5 2.85 4.97 92.2 113.0 1965-1966 3.09 100.0 57.3 3.09 5.39 100.0 122.5 1966-1967 3.38 104.6 59.9 3.23 5.64 104.5 128.2 1967-1968 3.49 110.3 63.2' 3.16 5.52' 102.3 125.5 1968-1969 3.16 112.4 64.4 2.81 4.91 90.9 111.6 1969-1970 - 3.26 113.·9 65.3 2.86- - 4.99 92.6 113.4 i970-1971 3.73 130.9 75.0 2.85 4.97 92.2 113.0 1971-1972 3.98 162.0 92.8 2.46 4-.29- 79.6 97.5 1972-1973 4.40 174.5 - 100.0 2.52 4.40 81.6 100.0 19-73-1974 204.2. 117.0 1974-1975 6.27 274.0 157.0 2.29 3.99 74.1 90.7 1975-1976 291.9 167.3 1976-1977 9.45 320.0 183,5 2.95 5.15 95.5 117.0 1977-1978 9.97. 336.3 192.7 2,96 5.17 95.8 117.5 Sourc. Baeccn and EA - 164 - Ta! A.21: RSGIONAL AGE RAIES ali PRCE 'MCS (A) NOMINAL AGRICULT'ýL~. fZi Akr,j -~-s: Cagayan Centzal N. & . 8 & . Year Ilocos Valley Luzon S. Tagalog Bicol W. Visayas E. Visayas Mindanao Mindanao 57-58 2.75 2.77 3.09 3.29 2.40 2.20 2.10 2.64 2.85 58-59 2.69 2.78 2.94 3.62' 2.30 2.14 2.14. 2.51 2.83 59-60 2.76 2.70 2.98 3.15 2.36 2.04 2.26 2.76 2.99 60-61 2.62 2.68 2.91 3.34 2.30 2.32 2.33 2.53 2.88 61-62. 2.67 2.72 2.76 3.13 2.41 2.27 2.37 2.64 2.97 62-63 2.82 2.80 2.96 3.30 2.57 2.42 2.45 2.78 2.92 64-65 2.75 2.86 2.84 3.29 2.73 2.58 2.40 2.75 2.93 66-67 3.80 3.11 3:.42 å4.89 2.54 2.51 2.77 3.17 3.91 67-68 4.05 2.96 2.99- 5.47 2.83 2.63 2.36 3.54 3.82 68-69 3.30 3.10 3.60 4.60 2.49 2.38 2.61 3.35 2.99 69-70 3.29 3.68 3.87 4.20 .2.72 2.46 - 2.54 3.45 3.22 70-71 4.01 3.58 4.08. 4.73 3.40 3.39 2.93 4.30 4.09 71-72 4.27 3.38 4.17 5.10 3.80 .3.77. 3.16 4.40 4.14 74-75 6.56 4.42 6.26 6.22 5.69 5.85 5.58 5.75 6.21 Source: BAECON data, supplI-ed by NEDA. (B) REGIONAL CDNSU=E PRICE IDE (1965-100) Caga.yan. Central N. & E. S& W. Year Ilocoas- Valley Luzan S. Tagalog- 3IcoL W. Visayas E. Vi3ayas Mindanao ±indanao 1957 71.9 71.9' 71.8 71.8 71.0 71.3 72.5 65.9 73.0 1958 74.1 73.6 73.8 74.0 73.1 71.5 73.8 72.2 74.7 1959 72.3 70.2, 72.3 72.4. 73.3 70.6 73.9 68.0 71.7 1960 76.5 73.8 76.1 77.0 77.6 73.3 78.1 69.&. 75.2 1961 81.2 79.3. 79.9 79.0 79.1 77.3 83.0 76.0 79.8 1962 81.9 80.7 82.5 80.3 79.7 79.2 85.4 79.5 83.8 i963 89.4å 86.1 90.7 86.9 89.4 85.1 93.6 86.2 89.1 1964 9-7.5 95.5 99.9 95.5 98.1 96. 95.4 92.4 97.5 1966 107.1 104.2 105.7 104.0 103.1 105.0 105.4 100:1 105.9 1967 114.8 107.6 111.7 110.4 109.4 113.5 1.1.1 102.8 108.9 1968 114.8 107.0 113.7 112.3 114.3 115.1 111.6 109.1 109.6 1969 119.3 111.8 115.3 110.7 117.3 118.2 112.4 108.0 113.4 1970 133.6 125.4 132.1 129.6 138.0 134.0 132.0 122.1 127.0 1971 162.8 155.4 157.5 157.3 164.1 161.0 172.2 158.6 167.7 1972 185.9 172.8 176.1 168.6 173.6 173.7 179.7 167.3 176.1 1973 208.4 202.3 198.2 188.5 198.2 198.5 198.4 183.4 201.4 1974 288.7 281.7 270.5 258.3 282.2 287.5 288.9 266.8 288.6 Source: Central Bank, unDulbished data. . . , - . . � . . . ! г . 4 • •и1. ь дг�?: лvУьиг.е ьил1, иыzьУ шсе ыАтеs [4v иинкеКч аУ 6CwrлTloy r.a[1ur Аьш ьУ lюидтнх 1v мви11.[ лмо cuш4Nns: 1ч36-1чэ7 � , � (ед[д1,11.1ыысис ди[а) (1912 t•с.иь) - j.A1 - ОС4УlPATlUN СКиlП' . _ _ ....... .... . ... C1yar 6 ��- � С..��. т СlиnгасСь yu.r Nыk.rд С.,иwиаl�i,гг_�L•_�4lкlыип ..Рпг�'+я� вlигkы��l.ьь @и5laawcu 1:�:ь•с.ь1_р'g,.._QF1'L'LL_.L.!L'Sауа._L!'L"4.УLУ13.�.Т4nы.ы141�а j1_.рциs Hмcliunlsв Мв1аСаГу .YL!.��.С..!!_.�и1_�.к11 1956 7'1.1U 1Ч.47 11.53 2].ЧО 1й.79 17,Y7 14.27 14.Ь9 1tl.64 26,tla 33.77 12.26 1д.54 1й.71 1G.u4 1'.'3 , � 19sr a1.r5 19.os п.s3 23,BS 14.so и.41 1{.07 15.]ь 1ь,80 2s,59 1s.7s i2.зи 1в,52 1й.s7 16.73 п, и 195в и.ао 18_1д ►7.ц 2Э.а7 и.9ь п.Ч1 14.о) 1s.25 1д. и 2s.65 14.97 12.]5 и.В9 14.37 17.ь1 1ь,•в � 1959 14_61 18.20 17.76 24,48 1].В8 18.60 14,66 ►5,.$6 18.Эй 25.В5 15,08 11.i5G l8.09 14.19 18..49 1ь-�9 1960 17,b{ 1),77 1).L6 1].89 1).64 18,26 1S_1] 15.13 17.5Э 2].87 13.55 1L(Ю 11.21 13.77 1).47 11, Э 19Ы 1L.2a 17.]8 17.0й 24_21 18.71 � 17.82 1].54 14_74 1а.02 2Э.l0 13.63 l1.17 16.{{ 11.01 16.:0 1ь, й 1962 14.69 14.59 1G,51 2].05 1Э,2] 17,15 13.21 17.62 1й.89 11.ЗЧ 13.Э3 I1,1I 16,{4 1).Ol 14.20 11,i3 196] 12.]l. 15,2] 16.75 22.ц 12.Чл , 17.84 12.91 1Э.1! lй.й7 20.11 13.55 10.92 1Ь.53 12.В1 16./Ч 11,i.1 196{ 11,]9 14.ьб 15.э5 21.]7 12.29 16,3в t2.nб 12_й3 U.54 19.62 ц,7о 1о.24 15.29 12.аб 15.иб , 1и. В 196т ц_йо t7.7s 15.дь ц,ц :2.Э1� 1ь.а] 12,1] ►2.]1 1з,43 19.вб г2.в2 1о.22 1s.27 tг.15 15.1о w. 1 � 1966 12_ц 1з.га 16.41 п1.вй 12.10 1ь,ss 11_9{ 12.о5 13.49 19.47 12.ео 9.еб t5,34 12.2я tй.ы 1и.•1 1967 � 11.52 1Э,.02 16,24 20,96 11.Ой 16,{] 11.92 12_OG 13.06 1в,8В l2,96 9.91 13.35 i1.6P 1],де 1и. 5 1968 11,зв 1],18 17.38 х1.в9 и.lи 17.й7 1з,ьв 12,хэ 13.вя 19.25 13.cs 1]_s3 1ь,и и.вс 1з,дб 11..в � 1969 10,49 1Э,99 tU,25 22_Т9 12,47 11,39 17.7] 12.1G 1].92 19.99 13.61 14.71 1ь.71 •14,86 15.19 11.'9 1970 9.9ь 12_БЬ 1L.y1 7о.91 11.д8 1Ь,40 I1_3Ч 12.]Ч ц.65 1).7В 12.7] 1].1ь 15.bf 1Э,вв 14.66 11. J 1971 9.45 11.7Ь 14.67 19.29 10_90 14.56 11.36 12.22 11.9В 16.21 blJO i1_Ы 1й,81 U.3t 12_)в W..�S 19)2 в.81 12.68 С1.]9 1В.14 11.26 13.45 10.дб 11.31 !1.l6 1b.I5 ' 11.OL 10.)t 14.00 12.34 17.1I 1о..2 1973 7,96 11,6] _ 11,86 1i,25 !0.8] 11.25 9.62 11.бй 1о,92 14.Ь0 10.36 9.Э9 12.67 11.вв 1л,66 9,lв 1974 6.24 8.92 9.80 14.61 -9.Ld 9.61 7.53 4,вь 5,29 11.14 9.54 7.о6 10J1 10.01 д,]В '!_.ц 1яп s.еь у,Зя 9.бо 14,зй 9,42 я.]2 7:13 в.54 в.е1 10.15 9,15 6.7в 1о.59 9.61 е.оь 7.,о _ 19)6 • 5_Ч] 7.99 Ч.29 1{,Эд 9.I7 в.97 ).07 l.]l В.81 9.76 Я.О] aJ7 1tl.43 9,5] 7.70 7.,Э 1977 а.11 7.91 8,92 1й,01 9.8U в.98 a.15 в,01 8.4? 9.35 9.19- 7,8Э 16_в1 9.11 8'4йп -7. N. WCr, улвl vыуц rr[rь Lьve Чсии uL[nlucd ьу ди(1дtlиц ы.оииу иыgи гьарв by tua соиваьысr угlсл cudnY (1912-106) 1и м+цllь, 2 � 5аигсв: Сир[гь1 tuul иЕ lLa 1'1ь111ни1nсв. • *•• + ' 1 (в) TtШU�tkY о _ - __ [. � ь диы оС и ьд• 1� 1вг1н 1о cn• W!ы л гиег � Кдв1 Уиуь К.[а. (1J65 ['г[свд). �.- L^___.__.�.е�.�и 3_�..�г__.__,�-f-_н._..!'�г 19й9^1Чi2, lu Iaduьcrlul lutaб' 1,8,anleejed о-А г си1[иыд пди.Суlrв п_Cha rhl�П по■ 11ыЬ.ыьnса !и мипllь ьцJ Sulh�rdn �nduetry П1�lь1оn�952-19Т2 j 65�1а0 l11 Yoгknt■ И1и1пу 6 Qиьггуiиу Мыооfдсеигiиу L'1ucLr1clCy, иес. Сои.ывсеь Та'див. L Сои+.. цk111кJ Uпч4а11сд 9ы1.г1ьд qдуи 8а1�r1�дд Чьуи drl.rlnd Увуь 3в1вг1ед Уиуь 8+l.ctsd Уьуи 9ы1аг1ед Удув Уаьг 1,:14orcra lлlюtеrд .__�1о,гесд RвriЮrs 1:иу,1�;ь L'вгnеСь Rм{а1о15С- егГиGгв Wы1.lцУье�ыгnдгь ешрlоуььt �'игnесь ея+аlсудьв Мвfрвг: i9йЧ зи.3t a.7L . 195о 1о,19 5.74 1951 8,дТ 5,э2 1952 9.58 6.34 tl7,S U9,tl 71,9 7о.1 ЧЬ,2 tl9,a 111,6 Ч,14 Ву.2 tlT,3 79.2 107,Я 19s] 1о,14 б.97 9].а 95.2 ы1.ь 7в.9 1оо.о 9в,б 122_о 92.в 69.4 9й.s в7.1 169,5 195й 10_]5 6.99 99_D 101.Ь 07,5 в].1 98.й ' 105,0 125,1 1ПJ,7 97.9 166_1 94.1- 115.0 1955 1о.й5 7.27 1оЭ.5 1о3,ь 97.6 ев.7 162,ь 1ав J 126,4 1а4.1 юt.1 1о5.4 97.4 117.f 1956 10.21 7.19 102,4 164.2 О6.Э 91.1 105.0 1о2,] 123.1 9l.о 164.7 112.6 99.0 I21.2 1937 1о,оо ь.Ч9 162,й 1оБ.о Вд.о 92.4 1о],] ros_t 112.в 1ай.9 16й.о 11о.б ю5.2 116,в 195В 10.а2 6,tl0 104,4 16J,5 9Э,у 9).8 102.6 107_S 120.5 101.4 lо4.6 161,6 110,6 11й.3 1939 1а.27 6_Ч2 110.2 1UB_9 � 107.0 ' 1о1,4 1D5.7 106.в 127.5 10д.; 1ЦВ.3 111.1 114.4 111.1 1960 Ч.85 6.k4 1I1.9 116,7 112;5 10],7 14].5 1a4,3 12],в 165.9 110,2 122,2 1l1.2 1I6.3 19б1 9.Ь7 6_э0 а12.6 1n9.3 714,л 1о7,з 1о].я loб.i n2Э.ь 1о1.й 111,о 11в,1 1оЧ.я 11й.1 19Ь2 9,25 6,32 �i09,B 1С-,.9 111.9 10],3 102.5 103.3 t19.9 96.9 16?.9 111.2 106./ 10д,в 196] 9,62 ь.s2 ►иэ.й 1оо,э 1оь,1 1а2,2 10Э,4 104.1 119_3 9Э.з 1оз,9 too.B 104.в 1д9.� 1ЧЬй 8_й8 Ь,а7 I01.4 94.в 9д.L 101.0 10о.1 99.7 111,в 91.5 101.0 Ч7,Ь 9в.! 96,! i465 у.51 Ь,74 100.о 1114,0 106_0 100,о 1а0,0 100,о 106.6 106,6 100.а 100.0 100.0 l00_0 � 144b 8,й7 Ь,йS 99.7 i44.7 91.4 1U2.y ЧЧ_7 101.f 116_1 !0),4 9д.7 1а2,в 96,1 167,4 - i96] 8.]5 'Е.Эб 95,4 104_2 д2,3 110,9 99,1 1о1.Ь 119.6 10L.9 93_l l61.7 95.0 100.0 196в 8,д1 ь_92 97�9 142.Ь 85,1 ]11.0 160:6 100,9 12L,2 10Э,4 9].б Ч7_1 в3.4 100.в 196я 9,1о 7.1а 1o0.s 1о4.ь в9,1 ыs,э to{,1 1о2_я ц3,в 1оч.s 96,2 Чs.о яе,1 1оо.3 197о в.4х ь.ыд я1_я ду.] 77.В toз.2 99,й 1о2,о u2.t 1о2,4 9Э.з 91.< в9.о 92,5 1971 �. п 6,42 вб,3 92.7 7<.s 1о1.ь яs.4 1о1,5 9а.л 92.2 ва,] вэ.о a3.t и.в 1:1>2' у3,в 92.8 70.в 99.6 92.i i6].1 96.в 91.1 В7,� 87.D в1.7 в7.! (ь У1�е ьацгсе c1[rd 1и (4) J�ды mt спдди[ь ul�дt6cr Fаlцуе 4.ииУ1ц аrв /ucluJeJ ог иле, ьис tЬь ргаьширСlип lд tn•C tЬру .г. тС (.н vlth tLь pC1�nr иьгtrи). /4 (ntludca оиlу иши..у vul:ид, иааасlr,ы рьу unJ рьу for л[сk lьuvn, Ьо1LJыуд uW vдиtlоивl pYl'lцдыа s.�ci( pr1v11e8cь ьв fUUJ rutlun, 1uJyluy, гдсгnьtlцо, вkс. 1Seu S[лсlысlсыl 1и![1�гlи, pecd.Lur 197], р. �ВЗ) 8иигеь: K1l<uLe11� Uеьу. "Аи АиыlуьU оЕ liэп-лугlсиl[игцl 11ea1 Увуь• 1n с1�ы Yh111pp[nna,° вдrьц, 1Ч73. Ustlьclon 1ь Ly [1ю Соиыwег Ус1еи 1иАеь 1и Иии11в. Uтlуlиы чаш сег (1lч4aJ :и Соыtгиl tlank о1 [Ьд pLl11рр1пцы, ti4aь.,lыtlcu1 &iZ1;t�n, и1иг. tha v.ye иегlиа дрl.едг гауиlигlу) xrc deьcrtLeJ +а "yrlvatr flло" (ог Ч:ь НоиSlд Fпд�мсгl•�1 �чtсьllыlилгцk ■erla■ ьцд "7b7 сооl.аг[[lny дatoLllchiueuC" fur сl:ь m.her auoinn (ьье 5спt1дt1еьl dul1et' п, oa:ceu�Lcr 19э7, р. ]в]), . � . � . � . _ - _ .. г .. . . . . - . • J М •7 ьt+ в,1>> ♦vУЧлсr. ueг.xtv слw�iгк:s рг r1+Y1.qYeu Чгг:х �ещ члllнУ Чииииlw 1Ч еЧ1штС вw Wvь:хгашиl' цlrlигl�УЧг ur wcut tыиiвтьУ CYCtiit {и tЧ�ЧrrlurYi 1ч7.4 - 1Y7L �Ч�У('Nil�.4.c.) ` Аргlсиlгиг•, У�гг•егу, • _ _ . ..� ио�,гlв.,в„д�1.м���н м��.лг.__-__г��,у ���•iI!`_Г1� F�w! it'.в.епгс. 1LL21Et.i. .:iJ _._,.L�'цlf..it21Y г �lLва,�.�у�. yi,���. �ух ����._:_`t lwucu .nJ Уиг Тrlчвгг Слvь[г.и+пС A1l eclv.ca Гяvвгив.аг 11} jclwu Сд+иrг.ь.nс ll trlwt. Гдувгпа.nk 111 Pclvг• Гмvвtт..вд[ 'у1в1 Ргlvвсв Covanrвot 1 1 ГЛvьlс 6w• пш�т г Л11 ' ' м.у 1Рь9 -- --- 2! -- -'- 34 ^- • --- 34 -- --- 4! -- --- i4 -- --- 11 -- -- ?i ысr�.с 1я71 11 i/ 1j йя 3/ уц_ й� 49 ус s4 1ио � st 77 11 11 11 ц йи Т1 ,г аиКивК 1Ч11 26 i1 • ?� :L 7! ]гу й7 U 3� 5У 1э3 61 5Ь 70 Fj 11 31 11 А1 ыи ti•� ��`ипс 197� 1f� ьь ., ;г N }L 47 U ц �t 1ц ь¢ 11 яЕ ц 11 if ц U а< 3� 1.,ц,.и.lчlй ]с 1s �s л1 31 �j ie 7у 3р )t �6I !j 1т �) � ц 1s / 1 ц 10 4L �i ,и�.с 1ч1� эь иs ц ги 111 1о аь ы g¢ и1 11у � У1 ыу � 17 ' j/ ц би ци ьи а�Ч�.г 1ч7ь йд ии дs к 1ия 22 1ь 1о ц ry т17 рх ич toa qь 1и . 1г 14 1о 111 ?, •�• J Иив гLш 5,}гК! рвгвnа. tu d�l. truчp.. �1 1Wt г.рдг[.S 1�г lй• ,�.иiв Ьь�.с1�о1,1.. • gaorcet Wг�ou.t Са�ии• Ь BcвtlвU с. Otttc• ьи�vсу и! lwиыо4иlа• ' . . Table A.14: CONSUME,1% PRICE INDI-CES FOR TIIE PIIILIPVINES, MANILA, AREAS OUTSIDE RANILA Otitside Manila Manila All PlillippInes Base Base Base Base 1965=.100 1972=1,00 1972=1.00 1972=100 1954 --- 42.6 --- 1955 42.2 1956 --- 43.4 1.957 71.4 ý0.9 44.1 41.5 1958 73.4 42.1 45.6 42.8 1959 71.9 41.2 45.1 42.0 1960 75.6 43.3 47.2 44.1 1961 79.6 45.6 47.8 46.0 1962 81.7 46.8 50.5 47.5 1963 88.9 50.9 53.4 51.4 196ý 96.8 55.5 57.8 55.9 196-r- 100.0 57.3 59.2 57.7 1966 104.6 59.9 62.4 60.4 1967 110.3 63.2 66.4 63.8 1.968 112.4 64.4 68.0 65.2 1969 113.9 65.3 69.3 66.0 1970 130.9 75.0 79.0 75.8 1971 162.0 92.8 90.9 92.4 1972 174.5 100.0 100.0 100.0 1973 204.2 117.0 114.0 116.5 19711 274.0 157.0 1.52.2 156.3 1975 291.9 167.3 164.6 166.9 1976 320.2 183.5 174.8 182.3 1977 336.3 192,7 188.6 200.4 1978 --- --- -- 215.0 1979 (Feb.). 228.7 Source: Central Bank S .. . ,. _ .. . ., , ь , , . , . . 1 ' Г r�ь1и r.1i: лvвылск ы8kк1.У рлµиlгlЬ.ч е>л s8l�creu Огсиееаlоlа$ иУ lигws•ruY 1ы г�т80 ылы7lл: 1ч7з �� ыид 1ч76 {BьtнLllцluninc да_s) {Iu ривиr fqs д 4б Lour ногk sэаей) O1v. Аь1сЕ --- F1г1д C11q.lc �-� -- -- _ . Тп4�ьдсiу СЗиеk Т A�ьtnlыCSaLlvc s.aLorec Сцr��епtе,уг L'1есСгlсlип Cnok р]iyplcirn • 1� 1и t ге7Э Т�7ь - 1s23 1�7ь � 1�7з 1s76 197з 1ч�ь __ 1s7з lsгб 1s73 lуiь 137з 1ч7б -i�i•1, _,��� : € АgтlсиlСиг4 6 Furcatry 7g 7li1 4об 515 й9 72 52 7Q 56 83 46 6] 20В 241 'ы 7! � Уlпадсlаl IпцСlСиСiипи 16В 171 ЭЬ5 5й0 --- --- 108 '/8В 705 166 1b9 --- 197 3i2 1 6 lIv сСиСrаг 8иr-1�ьицв 8в 14х бзз 89ы q� 147 11<) 18г 124 z1б --- --- 289 46о 1�6 �и, G.neтul СопСкисСлгв 61 1D1 41б 572 �5 �0 51 1Q1 бб 98 �-- 155 223 374 .Z '1:1 тw�иrCleYl�иrC вз аз•у з7ч 512 ьг вь �4 1ог в1 1ы4 --- --- 14ч 22ц �2 !з� MunыEuccuring 94 ]3и Зб1 584 6Э 89 78 7б4 9L 242 102 129 1tltl Э$б !2 l!ц :` rrlqCln� s гь:лllцtьlдВ 7з 11s 188 257 5г е8 s7 74 ь8 --- --- --- --- 778 ь5 !и� рrlцnси '.1аярltьi бб В7 i�•й 235 S2 7S б5 47 72 --- 6tl 94 124 324 Ю 9'ь а�гlУесс sсlьииlв 57 �о 184 27о s6 121 ао ч7 72 1об 64 1об цз 788 ь+. 1,ы, , � Т`ии1[с UC11iC1ca )0 l9U --- --- 117 177 --- 264 1Ч7 --- 154 266 --- --- 7 W 27й о, Тrвиара,тtвСlдьЕ� адд � l сои�ь,дlсаСlид 7� 107 Чоч 2эо s4 тЭ s6 �в 1о� 274 124 127 22ч Э7з sз �! г А11 6L'iьегь 107 L'2 1i6 й35 -=- 150 '-- -^- --- --- --- --- --- --- :{G !79 ' НеССо Nаи1Lь 1f)1 17b 38S 559 59 д� 58 I02 б8 12Э 91 �1 9} Э37 _б5 !16 1J р�сы геlа[ев to Нап11д оьil у. Sout.:c; Nugc. ctc§il вцlпrу цurvcy 1д СЬс 1'1ь1.11рр1nсць OEf1ce о)= циgи anJ po�lClon О1ырвlЕfсцlоы i . - � - � �, � � - гi s : lаыи л,tG, iц¢tиг:в uerxls 1�iи�riысц дР ыиlисгед дссиrьl'1гn�в >,� A�ra 1ы Риlиггlгпи, 197] лNу )97а . , (СвlиL�lь'иьи,�t двtв) ((ц Рииов fpT 9�0 11nur уи[k Чиnk� � Ё • O1v, Q,1nf ' p1u1J C11ulc g�eweicи�y Aroa C7�rM t A.Latolвcn�Llva иLаrов C�i,�-c�r Klaccriclw, Слиk 7L ���_ ���.� LУ�� •lсlви �1г1у4� tгиьlУi 1vi] i4iб_` `�' 191Э 19iЬ 1�`�З `�у76 1ч�i 1y�6 1я�7зi4уь 19j9 i�16 - ►£L__�ч_16 197� 141Ь _. 19 ��-- -�iц 1lеьсм MrгLL1.-v 1а1 1s6 звs ц9 sя а4 а8 1дг on 1гз 91 111 91 зЭг •д 1►Ь 11r 1;-г � Иогдtеrп L�xcu --- 95 -'- 472 --' 91 "- l17 -" l36 --' 156 --- ]96 .-- 125 --� 1пг . I1ugulo 56 72 J69 б82 бб 86 Ь9 92 бй 80 9] U3 9Э (19 6У �9L 71 9и ои�ир.о 1з8 17д s1� --- 88 111 147 162 1sa 17д 149 16а s49 дое eis }4й --- 1s�ь 8аисЬсrn 7ugaloQ --- 94 --- --- --- 9В --- L21 --- 129 --- 1д4 --- ]96 --- 99 --- Чи 1лg,мr lдЧ 96 - 442 --- 72 79 9� 101 82 121 7S --- 75 --- В] 114 1et --. < аиQи 44 67 --- --- ]9 Ь9 йй 7д l2 7) --- --- 96 --- b 72 4�l чii ^ Quaaon б3 11J --- --- i1 10] Sl� U2 5] i�8 --- 164 --- э92 --- 14l -^- --- : У1в.у,. --- 96 --- Ь2S --- BL --- 90 --- %4 --- 97 --- 19S --- 99 --- и � _ бчлlод 68 99 Э19 4й8 ЬО 90 62 91 _ б1 1] 59 11t 1Э9 ЭО] Ь� 109 t1 1;� сиьи 7z 9] зав е2г 67 е� Ь9 9► 1д 97 7й 1о0 1о] ]47 7� 99 Ь�, 1ии рлди8исr 64 9Э ]50 425 55 74 57 8й !6 6S S9 89 --- 19] 64 В8 1J !й� Т1м1м 62 99 й0Э 307 Вй ' 78 7д 74 71 9Ь �Q 72 --- 2I] 10� 97 U1 1д4 Loycd д0 91 17Э 51д 4В 71 !р , 17 S4 ВЬ --- --- 169 Э3д S6 ВВ --- --- � Ч L,danиo --- 108 --- 44: --- 16 --- 90 --- 96 --- 98 --- �72 --- D4 --- Li, ъисиаи 7tl i11 759 4GB 6] 18 д6 95 86 99 71 100 --- --- 7Ь l07 --- --- , cag�yau да oro 85 110 2б0 426 7В 76 В1 93 В2 100 79 89 254 --- В9 В9 itl 1 и � Со[иLасо 72 l05 --- --- �В --- 71 --- 71 --- 71 1д2 --- - 62 _ - 'л -- --- --- - � `�� 11lg.n 8l 1ий й17 43i 50 68 56 82 70 98 --- --- --- 18Э 34 8Э --- --- , У.ор.пg. 1Э8 ц о 51г --- 8В �11 1йг 162 15й 17д 1й9 16г 1й9 49В 12s 14й --- 7Yi � 1�г1�п i,�,-,ии _чэ 1�а ]ид sss -Ьз _ ыЭ чч 400 �ь цs ,�z 1ее 1„�у 3хь Ч� �1д i�z ��•, !I lЧ7Э двга rasltoe го 1lantl. ли1у. • б�wtcr; ниgв в,W иalrry ицrvлу 1п U,o Г1,111р�,t,ив, Offlсе о[ У+цt �pQ РовlСlоп ClвqalllarClon. • г `r. , I S д` з � . Ё 170 - ýble A.!:/: PER CAPITA NATIONAL INCOMI-E (ýTW-) AND PERSONAL GONSUMPTION --l 05 1 1aý77) ($972 Peescs) Per Capita Per Capita NatiaTi,-l Income Personal Income 1954 866 792 1955 889 824 i956 924 832 1957 942 839 1958 958 847 1959 987 855 1960 965 363 1961 997 879 1962 1,019 902 1963 1,051 928 1964 1,050 937 1965 1,074 954 1966 1,078 973 1967 1,087 989 1968 1,111 1,009 1969 1,129 1,018 1970 1,130 1,006' 1971 1,132 1,016 1972 1,174 1,024 1973 1,243 1,055 1974 1,266 1,075 1975 1,296 1,086 1976 1,361 1,094 1977 1,399 1,103 ComDound Rates af Growth 1954 - 1977 2.11 1.45 1954 - 1961 2.03 1.50 1961 - 1968 1.56 1.99 1968 - 1974 2.20 1.06 1974 - 1977 3.39 0.86 Source: NUA, Philippine Statistical Yearbook 1978. .... . ..... Table A.18t INCOME AND EXPENDITURES FROM TUE FIES (1957-1975) 1. AVERAGE FAMILY SIZE PhilippineB Number of Population FamilIeft Avg. Size (MLIlions) (Mil lioiIl of Family 1957 22.524 3.959 5.689 1961 22.665 4.426 5.121 1965 30.116 5.126 5.875 1971 36.602 6.347 5.767 1975 42.071 6.859 6.134 Current Pricea Conatant 1972 Prices (All Philippines Index) 1957 1961 1965 1971 1975 1957 1961 1965 1971 1975 2. AVERAGE FAMILY INCOME Philippines 1,471 1,804 2,541 3,736 5,840 3,545 3,922 4,404 4,043 3,499 Topl.'Urban 2,427 2,970 4,405 5,867 8Y29 5,503 6213 7,441 6,454 5,060 Manila & Suburbs 4,255 2,790 6,59Q 7,785 10,469 9,149 10,021 11,132 8,564 6360 Other Urban n,a 2,395 1,463 5,141 p1a Kn, 5,010 5,850 5,656 r,a Rural Areag 989 1,203 1,755 2,818 4t745 2,418 2,638 3,063 4,037 2,836 -'I 3. AVERAGE FAMILY v. IPENSES Philippines 1,285 1,793 2,877 4,479 6,526 3,096 3,898 4,986 4,847 3,910 Topl. Urban 2,116 2,688 4,621 6,810 0,761 4,798 5,623. 7,806 7,492 5,323 Manila & Suburbs 3,864 4,394 6,684 7,769 10,248 8,762 9,192 11,291 8L547 6,226 Other Urban n a 2,150 3,)32 6,448 p0,a n,a 4,498 6,304 7,094 11.a. Rural Areas 866 1,332 2,142 3,474 5,543 2,147 2,921 3,738 3,744 3,313 4. PER CAPITA INCOME Philippines 259 352 433 649 952 623 766 750 701 570 5. PER CAPITA CONSUMPTION Philippinea 226 350 490 777 1t064 544 761 849 840 637 Source: Famil; Incow and Expenditure Surveys (FIgS), J1GSO, Table A.19 3 '?").2LF)E!S dq'RN PRICES) 'V 1977 1975 . Agrculure, Fizhing & Foresc-y 14,852 17,292 18,15 2. Industrial 14,957 18,046 19,641 (a) Mining & Quarrying 517 612 ý 685 (b) anufacturing 9.,925 11,873 12,859, (c) Costucton 4,146 5,127 5,503 (d) Ulctricir7, Gasa . Watar 369 434 594. 3. Services (a) Transport, Comnication. 18,070 21,824 26,78a & Storage 546- 1,155 1,582 (b) Ca~merce 2,691. 3,704 6,491 (c) Services. 14.,833 16,965 18,715 Toral 47,879- 57,162: 64,584 Source: Nacional Accouncs Staff, NEM (b) FACT. SKARES 1971 1972 1973 1974 Factor Shares Value. Shares Value Shares Value Shares Value Shares l.. ComoensatiLon of .ployees 16,843 41.1 18,589- 40.6. 25,553 38.4. 30,406 37.6 2. Entrepreneuria1 and Property 22,433 54.8 .25,296 55.2 31,875 54.3 45,224 56.0 Income of Persona (1+2> (39,276) (95.9) (43,885) (95.8) (54,428) (92.7) (75,630) (93.6) 3. General Governnent Incoe for 84 0.2. 198 ' 0.4. 255 0.4 234 0.3 Propert7 & Entepreneirthip 4. Corporate Incom 1,600 3.9 1,70S 3.7 4,049 6.9 4,925 6.1 (a) Cororate Tax 957 2.3 865 1.9 2,577 4.4 2,421 3.0 (b) Corporare Savings 643 1.6 843 1.8 1,472 5 2,504 3.1 5. Nat:oaL '.ncome N? ar Facto 40,960 100 45,791 100 58,732 100 80,789 100 1975 1976 1977 1978 Value Shares Value Shares Value- Shares Valuc Shares 1. Comoensation of Employees 35,849 39.4 47,879 44.8 57,162 45.9 64,584 46.5 2. Enreoreneurial and ?-operty7 49,505 54.3 51,987 48.6 58,853 47.2 65,416 47.1 Income of Persons (1+2) (85,354) (93.7) (99,866) (93,4) (116,013) (93.1) 130,300 (93.6) 3. General Coverr=ent Income for Property & Encrepreneur3hip 493 0.5 626 0.6 847 0.7 å. Capital Income 5,243 5.8 6,382 6.0 7,709 6.2 n.a. k5.3) (a) Corporare Tax 2,003 2.2 2,231 2.1 2,695 2.2 (b) Corporate Savings 3,240 3.6 4,151 3.9 5,014 4,0 5. Nationsl Income, IN2? at Factor 91,090 100 106,874 100 124,571 100 138,800 Note: Value (million Pesos) Share (Percentage) Source: National Income Account3, and National Accounts Staff, NEDA, ?hilippie Statistical Yearbook, p.120. Tablå A,20. rERCErAGE OF FAH11.1E', RURAL AND URIAN. IN RECEMT v 1NCOIIE FRi SVECIFIED SOURCES, 1961-191 Total Vamilles pural Total Oirban Hetropolan aniila Other Urban Are.s Naturu of InCome 1961 1965 1971 1961 1965 1971 1961 1965 1971 1961 1965 1971 1961 1965 197 Wagen and Stlartt!d Agricultural 26.4 28.8 21.9 30.9 36.4 28.9 17.6 10.7 5.6 0.6 1.3 0.6 25.0 14.7 7.1 Non-gricultural 13.7 35.2 39.0 18.5 22.2 25.5 63.1 66.2 70.1 82.1 82.4 84.3 57.2 59.2 14. Entrepreneuril Activities Trading 14.7 15.5 16.2 12.0 13.5 13.6 19.8 20.2 22.2 14.5 16.5 16.3 21.5 21.9 24. IunuturIng 11.7 10.8 10.5 13.3 11.4 11.0 8.6 9.4 9.4 3.8 5.7 7.9 10.1 11.0 9.1 Transport 2.5 3.0 2.5 2.1 2.9 2.5 3.3 3.1 2.4 2.6 0.9 1.8 3.6 4.0 2.1 Other Enterpriues (including practice of profiaton ar trada) 3.3 2.6 2,4\ 1.7 l.5 1.4 .4 [5.2 4,61 5.4 3.1 6.6 5.4 5.1i il .3 1,4j 0 .8 0 .9) 2.5 2. 7) 2.0 3.71 ý2.8 2.3ý Vanaing (lncluding livestock and poulcry) 74,1 65.6 51.5 Q9.0 81.3 74.1 45.2 28.2 19.2 5.8 5.3 0.9' 57.7 38.1 26.1 rlling, Forestry and Hlunting 68.0 61.2 54.0 83.3 75.2 69.0 38.5 28.1 19.0 2.0 6.5 1.2 50.0 37.4 25.u ProductIon of ArtIclea for Oun Ute 54.4 42.2 29,7 64.2 50.3 17.2 ý5.4 22.4 12.3 15.2 18.6 5.4 41.8 24.4 15.t .andøvnerli Share of Cropa, .lvestock aUd roultry RtaImed bO Othera 0.6 11.6 8.6 10.3 13.3 9.8 11.1 7.8 5.4 1.4 0.6 0.8 14.1 11.0 7.. 10n-Agricultural Renta 3,5 5.4 5,4 1.7 4.3 4.0 7.2 8.1 8.5 11.2 9.9 7.3 5.9 7.3 8. utental våalue of Owner-Occie.pd 1ou1 e 92.8 91.7 87.8 97.6 97,7 96.2 p3.3 77.6. 68.4 52.3 48.5 35.6 93.1 90.1 80.,> Intereat and Dividenda 1.1 2.0 2.9 0.6 0.7 1.4 2.0 5.1 5.9 2.1 9.5 9.4 1.9 3.2 4.1 Froftta ro Sale of Stocke and Bonda 0.3 0.2 0.1 0.2 0.i 0.0 0.4 0.3 0.2 0.9 0.5 0.1 0.2 0.2 0. ren:iion ar Retire,Ment Benefit:S 1.8 1.2 1.7 1.1 0.4 1.0 3.0 3.1 3.3 3.1 3.8 4.7 3.0 2.8 2., back ray and eroceeda Froui Inuturance 0.8 0.1 0.3 0.3 --- 0.2 1.2 0.4 0.7 1.2 0.6 0.4 2.0 0.3 0. Cifea, Support, Asåatance and RliLef 22.1 19.8 28.0 22.7 14.5 24.7 20.9 32.3 35.5 14.5 67.2 39.7 22.9 17.2 33.9 1et Wining Froø Cabling2 6.3 4.3 4.7 6.8 4.3 4.9 5.3 4.2 4.4 1.4 3.4 3.0 4.5 4.5 4.9 Inheritance in Caih or Converted to Cash 1.3 0,7 0.9 1.3 0.7 1.0 1.3 0.5 0.8 0.4 0.1 --- 1.6 0.7 1.1 OLheri 1.0 0.2 0.7 1.0 0.1 0.ý 0.9 0.2 0.5 0.8 0.3 . 0.9 0.2 0.4 i/ Rent recelved frwm noa-agrlculcural landu for bu'dins, raotnu 4nd otier proparties. 2/ Ineluditig aw.epmtakeb and lotterted. SourcL: ILW(1974) Table 118. Data uaud waa fcom (~illy inama and expenditur iurvieya of rha bureau af tlie Cånaua an4 PtatLic. . _. . . . . . . . . . . . . . _. . . . . . . . . _ . . . - _ _ _ . _ , . о ' _ . .. - � � - 1 � � - _ � ` 4 t 1 т�l,lс л.21: РьАсеlгrлсе u1s•rRluirrгoн ok иА1111.1еs, шiАл1. е1ш иАиnи, ьУ rиан sоиеси ое Iнwrгe, 19ы -1471 У . Мьл1и Cauntry � Аигь1 Аrивы UгЬа» Агеаь _____,__у � А17 tfыCronollcan Nыulla Oclrar __ ньwго оЕ Iпссные � 196! 19Ь5 197i ]901 ]965 1971 19Ы 1965 1�71 19Ь1 1965 1971 1981 1965 1911 _ i ци ие ьлд Sulerlea 36 0 Э8 9 ЧЗ 0 2б 0 28 2 ЭЭ 1 55 5 64 3 Ь5 9 �Вх0 �(1у5 z7;.2 �В:S 58 2 61_б_ {S _.t_ ___с_ i �.г.� ,Ys-_ _ь_ r.г_ �_ � ,-к. Agrlcultural . . 1о,7 , . 1й.0 , , 2,9 . . 0,2 , . 4.0 � 1Wn^AgrlculCUCUI . , 92.Э . t 19.о . . 62.4 , . 77.0 . , 51.6 krterиpre»еигlыl AetlvlСlеи 58,0 5b 1 51.о б$ 7 _67�т �6 бdi7 37=,3 2Ч.0 26,1 17,2 1й.7 15r.� 47.6 3Si2 Э0:1 Тrвдlи(1 -- �.2 �2 6.2 '� р.а k.'� 10.Э 9.4 1� 8.b 7.9 �.б l�� 10.1 11.7 Flaaufдccur/ug 2.0 3.7 3.1 1,6 Э.8 2,7 2,8 3.7 4,Э 1.4 2.4 2.7 �.0 4.2 4.9 1'схгtардгС i.2 1.2 1.Э ' 0,8 4.9 1.Э 2,1 1,7 1.3 2.0 0,5 1.l 2.1 2.Э L4 � О[hьr Entarl,cleee (1»с1ид1»g ргисСlсс оЕ � Сгади аг рrоfивиlии) 1.4, 0.9 1,о 0,5 0.4 0.5 Э.1 7.9 2.� 3.Э 2.0 #,Ь 3,0 1.9 2.4 о,7 о.7 о,й о,у 1.2 1.й 1.4 2.3 1.2 1.о Увкаing (includ[.»g poulCry auJ 11vca1ock) 42.7 39.5 Э4.4 56.й 5Z.3 �7.3 16.1 9,1 4,5 1.2 0.5 0,1 20.8 12,8 6.1 F1eЬiag, FогивСгу �ьпд lluпtlnб 4.S 4.о 4.3 5.3 4.9 5.$ 2.9 1,9 1.9 0,2 --- Q.1 3.В• 2,8 2.6 . ОС1,иr 5,9 k",9 Ьг0 _5i3 4i2 _5i2 �4 Ьгб 8L1 �9 6.8 .�.а1� .�.с� . Ь.к6 F1.Э La»iloмrnr'ы 81и ги лf Сгоры, Llveatock иад YoutCry Аиlаед Ly {�tLura 1_4 у.0 1.7 1.5 2,3 l,9 1.8 !,Э 1,1 0,1 --- --- 2.3 i.9 l.5 ldлa-Agriculturul Rente 0.2 0.2 0,3 0,1 O.l 0.1 0,5 D,5 0.7 1,1 о.4 0.7 0.Э � 0,Э 0,7 ,'_. IuCeraьC and А1vlдгnды о.1 --- о,0 --- --- O.Q O.L --- 0,1 --- --- 0,1 А.1 --- о_1 � ProflCa Угит Su1ë of SCOCka ац1 lbnaы 0,1 --- --- 0.1 --- --- 0.1 0.1 --- о,1 0,1 --- --- 0,1 --- ,- Рсаьlоn ог HeClrueenC ьancflta 1.1 0,'1 О,Ч о.ч 0,� 0,6 1.1 1,8 1,6 1.3 l.4 2.� 1.5 1.7 l.5 i ' Вас1с ('иу ипд Рrдсеидв Рго:я L,auruncи --- --- 0,0 --- --- -'- --- --- 0:1 --- --- 0,1 --- 0.1 0.( , с1fСы, suppocC, Аавlысвиси пад ц<:1fиt 2 д 1.7 z,5 2,о 1.� 1.9 2.2 2.5 Э.9 1.5 Э.ч 4.Э ?.4 1.8 з.7 Nac цlnningu t'гдw с,ш,bц»g2 о.1 a.i о,з о.1 --- о,2 о.1 о,2. о,4 � --- -•- а.2 о,Э о,з о.5 IьтигlСьисд и саьlь от соп�игСид Со (.и�lь о,3 о,1 о,2 о.з 0.1 о.з 0.Э о,з 0.2 о,1 --- --- о,Э о,й o.z ? оlьогь О.г --- а.а . о.2 --- о.1 о.2 --- о,о o.s --- --- о.2 о.1 о.о Tota1 ]00.0 100,0 100 0 10о 0 100 П 10о 0 100 0 100 0 10о 0 100 о ]00,0 100,0 10о,0 )ро,о 100:0 1/ цеnС гесвlvед fraiь иол-аgгlсиlСиглl lиада for bu11d1ugы� rоагиа ыид лUrer рrориrсlыв, , 2/ InclцJing eveepaCakca ьnд 1оtСвrlев, . 9аитсс: 1гА (1974) Ть1,1и 117, 11ьо д{и а иас-д ыаы frcлa 1ша11у lnccwи илJ axpundlrurи витvиуУ оК CLe циrеьи of Clrn Се»вив аад SLUCluClca, M1 7. nr 3 A20 A-M m mu-,= PESC5 "i== 71=4US) EC,ujseb.old Labor Ullic3 Per valuft OE ýýn Ccmoarcialized scad. 01ý --,0u36n01.1 and :ccal V~ " RCU3.-ho Id c== åct:i-.,icy ?1= Toctucrs g~ hold UQUsuvt!* members 1-1 c cana* Incc« Cr.--ig«ýed UC-c 5.9 1.67 4.70 21.141-t, M2.7 M4ý9 ?238.0 P330.1 p 37.6 ?2,904.3 R,<ý,qd UCA 5 1 L 79 4-55- 617.31 304.3 874,3 135.9 i95.9 371.4 2,7!4.3-- ,JAýý ad UCA 5..5 1-% 4.33 569.3 698.1 1,264.4 z70.2 359..5 -- 2,161.7 ITP 3.3 1.35 4.71 M. 7 336.3 979.7_ 68.0 433..5 70.2 2,088.6 6.3 L91 1.08 51.3 1,417.1 iis 6. 631..5 20..5 2,603.0 ... ... ... . - 176 - Iable A.23: PERCZNTAGES OF AiMU4 ii%urt. ?ER E..~. Fl ü~RL~ ECUSER.L. jVD Qy.., .:;, Cr--- .:".'". Åm 0E-..M NON-AGRICULTURAL OCCUPATIONS (WESTEN VISAYAS) Percentage, of Annual Income Per Rural Eousehold Derived From: Of:-Farm. Off-Farm Agriculural Zone- Own Far- Agriculture NCok-Ariculture Total A. Irrigatad Rice 48 33, 19ý 100.0 3. Rainted Rica 33.5 33.2 33.3 i00.0 C. Rolln g Surgarcae/ Rainfed Rce. 40 36 24 i00.0 D. Upland 26 42 32 100.0 Source: Cascilo (1977) p. 230, based on E.A. Luning, A Micro Profile of Riral Employmenr and Inc=e, Working 'aper No. 5, NEA/PCAR/SFARCA/U=L3 Study on the Procass of Regional Planng, Western Visayas, Los Banos, Iloilo, lovember, 1976. - 177 - Table A.2W . 'EKLY F.2.UZ1GS OF Zý2LOYD WAGE '-D SAL.RY ZARE-RS BY OCCUPATION GROUP (1969-1976 (es) ar 1969 1971 1972 1973 1974 1975 1976 Farmers, Far Laborers Fishermen, etc. 19 33 24 28 34 34 43 Pro2essional, Technica.1 & Related Workers 70 82 93 97 107 11-5 130 Admhistraive, ExecutLve & Managerial Workers 153 135 148 187 214 291 296 Clerical Workers 54 69 71 75 85. 97 104 Sales Workers 32 48 40 45 48 61 68 Mines & Quary Workers 30 50 52 42 51 59 73 Workers in Transport &. CCunication Ociupations 43 53 53 55 63 73 81 Craftsmen, ?roduczion Process and Related Workars 35 48 44 48 50 57 64 Iianual Workars & Laborers nec. 32 36 37 38 43 47 56 Services, Sports & Re.ared Workers 21 27 28 29 33 36 44 a/ Miay series, except August 1976-- Source: NCSQ housao.OL data - 178 - Table A.25: WHOLESALE PRICE INDICIES OF EUORTABLE, MPORTED AND LOCALLY PRODUCED COMMODITIES IN HANILA AND ZXCaZGE RATE !%DE OF PHILIPINES (1972 = 100) Exportable Imported Locally Produced Exchange Rate Exchange Rate Commodities Comodities -Commodities Index (Pesos Per US$) 1956 32.4 38.4 39.5 30.2 2.023 1957 33.9 40.4 41.1 30.2 2.023 1958 37.5 42.1 42.1 30.2 2.023 1959 42.4 45.9 41.4 30.2 2.023 1960 41.3 48.5 43.4 30.2 2.023 1961 42.9 51.0 45.5 30.2 2.023 1962 51.9 55.8 46.4 57.2 3.831 1963 62.2 59.3 50.4 58.4 3.915 1964 60.4 59.8 54.0 58.4 3.915 1965 62.0 60.1 55.4 58.4 3.915 1966 62.8 60.5 58.6 58.3 3.909 1967 66.7 60.6 60.0 58.6 3.930 1968 74.7 60.4 60.7 58.7 3.935 1969 73.4 62.3 61.8 58.8 3.937 1970 91.1 81.9 75.3 90.6 6.069 1971 97.7 93.1 89.0 96.1 6.443 1972 100.0 100.0 100.0 100.0 6.701 .1973 129.4 117.9 119.4 100.9 6.763 1974 217.1 180.7 180.5 101.4 6.795 1975 184.7 215.8 189.9 108.6 7.275 1976 195.7 232.4 211.6 111.1 7.447 1977 246.0 239.6 229.2 110.5 7.407 1978 271.5 250.0 245.6 110.1 7.375 ( Note: The series for the period 1956-1971 with base 1965 have been converted to base 1972 by linking the old series to new series Sources: Central Bank Statistical Bulletin, and 1/ Bureau of Agricultural Economics, Trade Assistance Centre, Department of Trade, National Census and Statistics Office. 2/ IMF, IFS; May 1978, July 1979. - 179 - l A25 2RICZ INDICES OF CHESTIC "D FOR-IG' CRRECY RICES OF 2ORTABLES 4holesale Price Index Unit Value Index Col. (2) of Imported Goods of Lmports Col. (3) (1) (172 100) (1972(T 100) 1956 38.4 62.7 61.2 1957 40.4 64.8 62.3 1958 42.1 66.2 63.6 1959 45.9 67.6 67.9 1960 48.5 69.1 70.2 1961 51.0 70.1 72.8 1962 55.8 71.4 78.2 1963 59.3 76.2 77.8 1964 59.8 76.8 77.9 1965 60.1 78.1 77.0 1966 60.5 79.4 76.2 1967 60.6 81.2 74.6 1968 60.4 88.6 68.2 1969 62.3 90.2 69.1 1970 81.9 93.5 87.6 1971 93.1 95.5 97.5 1972 100.0 100.0 100.0 1973 117.9 128.8 91.5 1974 180.7 211.6 85.4 1975 215.8 219.6 98.3 1976 232.4 217.2 107.0 1977 239.6 241.1 99.4 1978 250.0 249.9 100.0 Source: Central Bank of the Philippines. !__＿一 181 - Table A.28: XONE7 lWAGES C1956 - 1978) Unsk:illed Labor Agricultural 'Wage Year C197Z = 100) (Pesos) 1956 50.5 2.64 1957 49.9 2.66 1958 30.2 2.63 1959 50.6 2.66 1960 50.7 2.65 1961 51.9 2.65 1962 53.9 2.78 1963 56.3 2.72 1964 56.9 2.76 1965 60.8 3.09 1966 65.4 3.38 1967 ý8. 4 3.49 1968 76.1 3.16 1969 79.7 3.26 1970 88,4 3.73 V 1971 94.4 3.98 1972 100.0 4.40 1973 102.6 1974 110. 8 6.27 1975 120.1 1-976 126.2 1977 132.9 1978 138.4 Source: Unskilled Labor C. Bank Sezies Agricultural Wage BýA.ECON Series 71~ N D