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Philippine / Unemployment rate in 2013 had worsened to 27.5 percent

It is saddening that despite the rapid economic expansion for the past two years, millions of Filipinos remain unemployed. This is what economists refer to as “jobless growth,” a phenomenon that afflicts many developing countries, debunking the myth that economic growth automatically translates to employment and poverty reduction. Capture d’écran 2014-02-18 à 13.55.29

Halfway into his six-year term, President Aquino last week challenged his Cabinet to come up with an action plan for poverty reduction, mainly through job generation. He presided over a rare full-Cabinet meeting after a Social Weather Stations survey showed that the unemployment rate in 2013 had worsened to 27.5 percent, equivalent to an estimated 12.1 million, as 2.5 million Filipinos joined the ranks of the jobless between September and December. And yet the economy expanded by 7.2 percent, the second-fastest in Asia after China’s.

There are several proposals to address unemployment, but sadly, there are no short-term ones. These measures are well known to the Aquino administration and its predecessors. These involve structural reforms that will make it conducive for investors to put money in factories and brick-and-mortar industries. Only recently, the Asian Development Bank, in a publication titled “Taking the Right Road to Inclusive Growth,” reiterated that the Philippines’ failure to boost its industrial sector was a key reason its economic growth remained far from being inclusive.

“The Philippine economy’s chronic problems of high unemployment, slow poverty reduction and low investment are reflections of the sluggish industrialization,” the ADB said, pointing out that it is the industrial sector, which includes manufacturing, that should drive the economy to substantially reduce unemployment and poverty. Economic growth during the past years had been fueled by the service sector, mainly the business process outsourcing industry. According to the ADB, the industrial sector, compared with the service sector, has the better ability to create more job opportunities for the poor and a much higher multiplier effect on the economy. The ADB suggested more government support for the industrial sector through investments in education, skills training and infrastructure to achieve inclusive economic growth.

Chosen excerpts by Job Market Monitor. Read the whole story at Solving unemployment | Inquirer Opinion.

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