DOLE chief admits economic slowdown

Labor Secretary Bienvenido Laguesma admitted yesterday a slowdown in economic growth, which he said is causing more employers to hedge in putting more people on the payroll.

Laguesma said employment has tapered off because of the continued decline in construction and the slow recovery of the manufacturing sector.

Recovery in manufacturing is sluggish, while growth in service employment decreased because of employment in community, social and personal services, he said.

"We are on the road to recovery, but we are on a slow mode and the pace is not enough to (significantly) bring down the unemployment rate," Laguesma said.

Unemployment remained high, declining only slightly to 9.7 percent in 1999 from the previous year's 10.1 percent, according to the Bureau of Labor and Employment Statistics (BLES).

Laguesma attributed the situation to the uncertainty of businessmen to make decisions, causing a slowdown in investments and a resurgence in inflationary pressures.

However, he refused to say if the businessmen's "wait-and-see" attitude was triggered by political developments and the impending Cabinet reshuffle.

"I don't think political scenarios play a major role," he said. "There must be a bigger reason why investors are still hesitant to start their businesses."

He said the underemployment rate edged up slightly to 22.3 percent in 1999 from 21.8 percent the year previous.

Laguesma is confident that the period of adjustment would only be for a short period, and that he is expecting a higher gross national production.

"While the immediate attention has generally been on the economic, financial implications of the crisis, stronger concerns are now being directed on its social impacts," he said.

He said the government is trying its best to avoid displacement of workers and the further erosion of the income of families to prevent social tension.

"We have been studying various interventions designed to address the plight of the sectors most affected, reflect on some experiences and identify the challenges that need to be overcome, and recommend measures to benefit from the lessons learned from the crisis," Laguesma said.