MANILA, March 6, 2006
 (MANILA TIMES) By Cheryl M. Arcibal, Reporter - THE phenomenal growth of the Philippine call-center industry is unlikely to address the country’s unemployment and underemployment woes, the Asian Development Bank said.

In a recent study, the ADB said the country cannot bypass the traditional stages of development through the transition from agriculture to industry and then to services.

“Most likely call centers, and in general most service activities, cannot provide the impetus that the country needs to generate sustained growth,” the study said.

Citing earlier studies, the ADB noted the “close association” between the expansion of an economy and the growth of the industry sector, affirming the sector’s role as “the engine of growth.”

“What is special about industry and particularly manufacturing industry? Since differences in the growth of GDP are largely accounted for by differences in the rate of growth of labor productivity, there must be an association between the growth of industry and the growth of labor productivity,” the ADB said.

GDP stands for gross domestic product, which is the broadest measure of a country’s economic output.

Although the creation of employment by call centers in the Philippines cannot be dismissed, the government shouldn’t consider the sub-sector as the solution to its labor problems, the regional lender said.

“It must be added that only about 4 percent of the applicants are taken. This is because the large majority of the applicants do not meet the basic requirement for the positions, namely, to be able to speak very good English,” it said.

While English is widely spoken in the country, only a small proportion of its citizens speak very good English and those hired by call centers are university graduates “for whom a job in a call center is a form of underemployment,” the ADB said.

The National Economic and Development Authority expects the services sector, which includes call centers and other business process outsourcing businesses, to lead economic expansion this year by growing 6.8-percent over last year. In 2005, services grew by 6.3 percent.

NEDA said revenues from call centers rose by 52 percent to $3.7 billion and that 103,000 new jobs were created last year.

The latest report of the National Statistics Office showed that the number of jobless Filipinos increased last October because more people were joining the labor force than there are jobs available.

The report said the unemployment rate in October jumped by 7.4 percent to 2.6 million, from 2.4 million in the same period in 2004.

The NSO is set to release a new report on the unemployment rate on March 10.

Chief News Editor: Sol Jose Vanzi

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