Situation of Economy of the Philippines

Jobless recovery has truly hit the Philippines. Despite being the 40th largest economy in the world and despite having larger GDP and GNP rates, the unemployment rate of the country rises more than ever as technology continue to be more advanced. The Philippines’ full year Gross Domestic Product (GDP) in 2013 grew by 7.2 percent, higher than the government’s expectations of 6 percent to 7 percent and despite several challenges that strained the economy last year (Lopez, 2014). Gross National Product in Philippines increased to 2075531 PHP Million in the fourth quarter of 2013 from 2047706 PHP Million in the third quarter of 2013 (Trading Economics, 2013). This is despite the man-made and natural calamities that brought economic stagnation on some regions of the country, like what happened in Tacloban when it was struck with super typhoon Yolanda. Philippines’ economic boom has really been jaw-dropping, and even the foreign countries get amazed and call the country as the “Asia’s rising tiger economy”.

Services sector is the main contributor on the country’s real GDP, which has a contribution of 3.6 percent in the last quarter of 2013 (Lopez, 2014). It is followed by the industry sector with 2.8 percent, and the agricultural sector with 0.1 percent (Lopez, 2014). Services sector has really been a great part of the post-industrial economy, which is characterized by advanced information and computer technology. Services jobs such as being a call-center agent and other computer-related jobs get more demand in the post-industrial world, while the demand for industrial and agricultural jobs get lesser than the past years.

Business-process Outsourcing (BPO) in the country offers more job slots for the Filipinos, as the top ten BPO firms in America operate here in the Philippines, such as Convergys. The BPO industry is estimated to create more or less 100,000 jobs every year (Garcia, 2012). Last 2012, The BPO industry employs some 700,000 Filipinos. Around 61% of the BPO workers are employed in call centers (Garcia, 2012). BPO and other computer and technology-related jobs is one of the top priorities of the Philippine government. Department of Science and Technology (DOST) and Department of Labor and Employment (DOLE) have made efforts to create more technology-driven jobs (Anonas, 2014) .

DOST launched its new umbrella Science and Technology program called Smarter Philippines to maximize the effect of Science and Technology on communities and people and eventually improve the quality of life of Filipinos and drive socio-economic growth throughout the country (DOST, 2012). Smarter Philippines project would help create more technology-related jobs for the Filipinos. DOST would even innovate for more advanced technologies to be used in the manufacturing and agricultural sector, such as technologies in handicraft making, fiber glass bancas, foldaway shelter, ceramic water pot filter, bakery products, charcoal briquetting, vegetable noodles, waste recycling, and complementary foods for babies (DOST, 2012).

These advanced technologies could boost the country’s production. However, it would have great effect on the country’s employment. In the agricultural sector, for example, which has the 32 percent workforce in the overall labor force of the Philippines (World Bank, 2014), advanced technologies would replace the human labor force, and thus would lead to vast unemployment in the agricultural sector. This is also the case in the manufacturing sector, where huge machines, robots and computers replace the human work.

In January of 2014, Philippines jobless rate rose to 7.5 percent, up from 6.5 percent in the previous period and 7.1 percent a year ago (Trading Economics, 2014). There were nearly 3 million unemployed in the Philippines, up from 2.8 million in January 2013; among the regions, the National Capital Region continued to have the highest unemployment rate at 11.2 percent, while it was 9.5 percent for January 2013 (Trading Economics, 2014).

Technology replacing human labor is one of the reasons of this rising unemployment rate in the post-industrial economy. However, there must also be consideration on other political and social factors that could affect this rising unemployment in the country. One factor of this rising unemployment could be the uncontrolled rise in population. As more people belong to the labor force, more people would not be able to get jobs, especially now in technology era. The economy creates the same number or lesser job demands, while the number of people in the labor force consistently grows. When this growing population trend continues, more people would not be able to have adequate income to maintain quality life to their families. There would also be a greater urge for employers to implement contractualization, where employees would only have job on specific period and would not have permanent jobs for their living. To solve this problematic trend, the government must control the population, like what the current administration now is doing—implementing the Reproductive Health Law.

Another one is the low-quality education of many graduates. Some job seekers might have the title of being a graduate of a specific field, but their skills are not competent enough in the employers’ perspective. Therefore, they could not get the job in line with their field of education. The tendency of this case would be a job-skill mismatch. If job seekers would not be accepted on jobs in line with their education, they might just apply on some jobs which are in demand but not in line with their skills. To solve this, the government must improve the education of the country. There must be more funds for education, so that there would be more money to improve facilities and to employ more teachers. There must be cancellation of paying foreign debts, so that the funds would be allocated to the more important needs of Filipinos. There must also be consistent watch on graft and corruption, so that the allocated funds for education would not be gained by only few people.

Unemployment is really one of the most pressing issues of the post-industrial Philippines. To control and reduce this problem, societies must work hand-in-hand and continue to make efforts for a better Philippines.

References:
www.tradingeconomics.com/philippines/unemployment-rate