Publisher:
Philippine Institute for Development Studies, Quezon City, Philippines
The services sector is composed of a diverse range of services from retail and business services to education and health. Some services are used as inputs in production, while others have direct impacts on human capital development. In the...
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ZBW - Leibniz-Informationszentrum Wirtschaft, Standort Kiel
Signature:
DS 146
Inter-library loan:
No inter-library loan
The services sector is composed of a diverse range of services from retail and business services to education and health. Some services are used as inputs in production, while others have direct impacts on human capital development. In the Philippines, services account for 60 percent of GDP and almost 57 percent of employment. Across regions and sub-sectors however, the contribution of services varies. To examine the patterns at the regional and sub-sector level, a simple shift-share technique is used which decomposes changes into three factors: the national share (growth effect), the industry mix (sectoral effect), and the regional shift (competitive effect). Focusing on changes in employment, the shift share decomposition reveals that the overall growth of the economy from 2012 to 2018 had a positive impact in all sectors and regions. The sectoral effects were negative in a few industries, however, namely: Accommodation & food service activities; Arts entertainment and recreation; and Education. Industry-specific factors in education services were quite strong that the dynamism of the economy failed to offset the industry mix effect. It was the only sector that registered lower total employment during the period. In terms of the regional shift effects, 109 out of the total 204 regional service industries (53.43 percent) displayed locational disadvantages. Shift share is a purely descriptive tool and further analysis will be needed to explain the factors that influence sectoral changes and a region’s economic potential and constraints. As services are critical for production, human capital development, and enhancing the quality of life more broadly, understanding the drivers or inhibitors of services growth and addressing the locational weaknesses in the relevant service industries will be useful in promoting regional growth and a more balanced economic development of the country.
