Business World, 11 March 2013


The unemployment rate in January 2014 is inconsistent with the picture of a growing economy. The rate of joblessness has bounced back to 7.5%; yet even this number understates the gravity of the unemployment problem. Why? First, less workers are looking for a job since labor force participation rate (LFPR), the proportion of population 15 years and above who are looking for a job, was down — to 63.8% in January 2014 from 64.1% in January last year. Second, Region VIII, the region battered by typhoon Yolanda, was not covered in the January 2014 labor force survey (LFS).

The number of unemployed workers has increased to 2,969,000 in January 2014 from 2,776,000 in January 2013, or by 193,000 workers. A growing economy should be creating more jobs, not losing them,

Those who joined the army of unemployed are mostly college undergraduates and graduates. The number of unemployed workers with a college education rose by 149,939 — from 832,800 in January 2013 to 982,739 in January 2014. This represents a huge loss in human capital investment.

By educational attainment, 33% of the unemployed are college graduates (19.8%) and college undergraduates (19.8%), while another 34.0% are high school graduates.


First observation: while so much in public funds — P62.6 billion for 2014 alone — is set aside to keep young children longer at school, what is the government’s program to reward those who persevered and helped themselves get a college education?

The incidence of unemployment is also pervasive among the youth. Unemployed workers in the age group 15 to 24 years account for almost half (48.2%) of the total, while those in the age group 25 to 34 account for 29.9%.

Joblessness is most severe in the National Capital Region, with the unemployment rate estimated at 11.2%. The pull of the metropolis can be explained by its superior urban public services (better public schools and medical facilities and transit system).

Second observation: What’s the government’s program to develop other growth centers other than the NCR? Good public schools, medical facilities, and other urban pubic services should be provided in other major and secondary cities in order to decongest Metropolitan Manila. What’s the government doing about this? Why is there an overconcentration of transport projects in the NCR?

In addition to unemployment, underemployment remains serious. There are some 7,101,000 workers who want either paying jobs, or more hours, or simply better jobs than what they currently have.

The underemployed are mostly in agriculture (2,961,000) and services (2,919,000).

Of the 36,420,000 employed in January 2014, 3,860,520 workers don’t even get paid. These are those who work without pay in own-family operated farms or businesses.

Third observation: unemployment and underemployment is a form of “market failure.” This provides a rationale for government intervention. Relying on the market economy, on economic growth, won’t be enough. The business-as-usual attitude, with no sense of urgency and direction, won’t work; it will only exacerbate the problem.


According to a 2013 World Bank study, by the time President Aquino III steps down in 2016, the state of unemployment in the Philippines will be as dismal as it was before he assumed the presidency — if not worse.

The study forecasts that 12.4 million Filipinos, or 11.5% of projected population by then “would still be unemployed, underemployed, or would have to work in the informal sector where moving up the job ladder is difficult.”

With the current state of joblessness and given that some 1.2 million new workers join the labor force every year, the challenge for government authorities is how to create 14.6 million jobs in the next four years.

But, in addition, they should make available better jobs for the other 21 million Filipinos who are informally employed — those who were self-employed, unpaid family workers, and wage workers with no written contract, social insurance or protection from dismissal.

In a couple of weeks, a new batch of college and high school graduates will leave the confines of their academic institutions and join the labor force. What kind of future will they face? Bright or bleak?