Press Release
November 26, 2008

Gordon: Cushion Impact of Global Crisis through Employment and Enhanced Social Protection

Independent Senator Richard J. Gordon has proposed two approaches that could pump prime the economy and prevent it from being seriously affected by the looming global financial crisis, which has hit even first world countries, such as the United States.

In a privilege speech, Gordon said the government should give undivided attention to pump priming the economy by (1) establishing programs for public sector employment and (2) enhancing social protection, especially among the most vulnerable sectors of the society.

"There is a contagion happening in the whole world today, where the mightiest nations, like the United States, have practically been diminished," he said, apprehensive that the country's gross domestic product, adjusted for inflation, grew only 4.6% in the first half of this year compared to 7.6% in the same period last year.

Gordon pointed out that the government must take lead in creating jobs since the latest National Statistics Office figures showed that 7.4 percent of Filipinos are unemployed while 21 percent are underemployed.

By increasing infrastructure projects in the countryside, such as secondary and farm-to-market roads, which are labor-intensive, he said the government can engage in job creation and stimulate the entire economy.

"Responsible and vigorous public sector employment and enhanced social protection programs stand a good chance of overcoming the adverse effects of the looming global recession spawned by the financial crisis," he said.

Gordon cited the 94-kilometer Subic-Clark-Tarlac Expressway (SCTEx) for generating more than 3,400 jobs at its peak level by hiring site workers, heavy equipment operators, engineers, SCTEx-project management office staff and other construction-related professions.

"These road projects integrate rural agricultural areas to the urban centers resulting in increased incomes for farmers and fisher folks. As rural and urban markets get integrated, the private sector is encouraged to invest and locate in the countryside," he said.

"A public sector employment program anchored on investing and modernizing our country's infrastructure is consistent with the short-tem concern of job creation, and long-term goals of poverty eradication and balanced regional industrialization," he added.

Gordon also said the government should enhance social protection programs by strengthening all government institutions responsible for social insurance and line agencies in charge of social welfare.

He proposed that the government should look into the possibility of merging the Government Service Insurance System (GSIS) and the Social Security System (SSS) so that it would be easier to examine how these government-controlled corporations are being managed.

"At the very least, such an institutional reform will reduce the cost of running the system and making it responsive to the needs of the membership," Gordon, also chairman of the Senate committee on government corporations and public enterprises, said.

As part of enhancing social programs, Gordon also said the Department of Social Welfare and Development must have a system of identifying truly deserving beneficiaries in delivering government programs to avoid leakage, while also having a mechanism for exiting from the program so as not to encourage welfare dependency.

He said the government must seriously look into these twin proposals to mitigate the possible adverse effects of the global economic recession to the country's economy. (30/tgp)

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