Position Paper

17 December 2021

Unemployment and Poverty in the Philippines: Effects on the National Philippine

Economy

Background

Unemployment and Poverty are major issues in the Philippines today. Most countries in

the world have cases of unemployment and underwhelming poverty which puts a lot of

burden on the economy. Philippines as a developing democratic country in the south

East Asia witnesses' high rate of youth unemployment and extreme poverty which has

become few of the major threats to its overall economic state. The study analyzes the

cause and effects of unemployment and poverty in the Philippines, particularly

discussing its effects on the economy of the country and ways to tackle unemployment

and poverty as a means to improve the current level of the situation.

Unemployment

Being unemployed is defined as having no work, seeking for work and has a need for

work. The number of people that are unemployed are usually measured by the labor

force. The labor force are the ones who are employed and unemployed(Villegas, 2016).
The Bureau of Labor and Statistics has defined an unemployed person as someone

who can work, who is able to work and is seeking for work. It stated that an unemployed

person is seeking for work but cannot find employment or is not being hired from most

work industries. Further defined, unemployment affects the economy of the country

especially in terms of deficiency production. In other words, the lack of manpower which

affects the production rate, affects the economy as well.

Causes of Unemployment in southeast asia (Philippines)

Despite the rapid increase in progress of the Philippine economy, the country is still one

of the southeast asian countries which suffers from the imminent effects of

unemployment. There are typical reasons for cases of unemployment however the term

becomes complex regarding the issues that surround the study. The Philippines has a

booming economy and has shown great positive progress; however, its unemployment

rate still ranks highest among its neighboring Southeast Asian countries. According to

Felipe & Lanzona (2006), the cases of unemployment and underemployment on the

country are the major problems which affects the economy greatly.

There are many factors which affect the high unemployment rate in the Philippines and

one of them is the rapid Population Growth which severs the level of poverty as well. As

a probable cause of unemployment in the Philippines, the unavailability of jobs provided

by our government would set above others if given a comparison. In the near future, the
current population in the Philippines will be really high which is ranked 3rd from the

world(Central Intelligence Agency, 2013).

Talking about the Youth Unemployment Rate In The Philippines year 2019, the youth

unemployment in the Philippines was based on the educational attainment of

applicants. Most college undergraduates and individuals with only a high school

attainment are the ones who compose the unemployed workers today.

Table 1: YEAR UNEMPLOYMENT RATE

YEAR Quarter 1 Quarter 2 Quarter 3 Quarter 4

2005 11.3 8.3 7.7 7.4

2006 8.1 8.2 8 7.3

2007 7.8 7.4 7.8 6.3

2008 7.4 8.0 7.4 6.8

2009 7.7 7.5 7.6 7.1

2010 7.3 8.0 6.9 7.1

2011 7.4 7.2 7.1 6.4

2012 7.2 6.9 7.0 6.8

2013 7.1 7.5 7.3 6.4

2014 7.5 7.0 6.7 6.0

2015 6.6 6.4 6.5 6.6

2016 5.8 6.1 5.4 4.7

2017 6.6 5.7 5.7 5.0

2018 5.3 5.5 5.4 5.1

 2019 5.2 5.1 5.4 4.5

Table 1: Quarterly Rate of Unemployment in the Philippines from the year 2005 to 2019

The table above shows the different quarterly rate of unemployment in the Philippines

from the year 2005 until 2019. Among all the years, 2005 has the highest percentage of

11.3. While the year of 2019, has the lowest rate of 4.5 from the fourth quarter.The

joblessness affects and causes a great crisis towards the economy. Based on a

conducted research, the Arroyo administration has the most cases of joblessness

compared to the previous administrations, because of its unemployment rate in 2005

(Olliveros, 2006).

Unemployment is one of the major causes of poverty in the country, there are many

factors which affect the rate of these cases and it needs to be apprehended by all

means of government support. There are many who choose to go abroad to find a

better job because of the lack of employment in our country and this does not only affect

the economy but proceeds with a negative impact on the country itself. The government

promises that they will act upon the needs of the country however there's not much from

their efforts that reach the citizens. It's all a promise that slowly disappears and because

of that the citizens would find a way for them to survive poverty.

To survive poverty and find a proper source of income, people would consider working

abroad, working jobs that aren't connected to the course they finished and worst is the

situation where crime is committed for money. The country's system for employment,
underemployment and unemployment shall be reformed. A change needs to be done,

and the most advisable solutions I come up with would be the following:

● Monetary Policy

● Expansionary Fiscal Policy

● Funding proper education

First, by providing funds for proper education. Many educated citizens would be able to

get higher job offers and they would be able to see through the absence of available

jobs, after all better-educated people can get higher-paying jobs. They can have more

expenses because of higher income. Monetary policy on the other hand would be

another solution which the government can provide, what does it imply? It is the

adjustment of lower interest rates which would make expenses and income easier for

families. If monetary policy does not work then there is another solution which works

slower but is quite reliable when executed, that is the expansion of fiscal policy which is

about the government making adjustments particularly on cutting taxes or increasing

spending to stimulate the economy. Poverty in itself explains a lot of details for our

current economic state, poverty is interconnected with unemployment which is a cause

and effect situation. If one can be apprehended then one can be solved, providing

solutions for this type of problems will involve the use of financiality which the

government shall manage, however that is another problem on itself. The Philippines is

full of debt to other countries which makes it difficult for the government to provide

enough work and assistance for the major individuals who seek work.
Thinking of many situations, poverty revolves around those who did not get enough

education and now live in isolated areas. People who cannot get approval on their

applications because of the lack of documents and requirements also suffer the same

treatment of not being employed or being in contractualization.

Conclusion

To sum it all up, unemployment and poverty are two aspects which affect the overall

state of the country's economy. The causes of high unemployment in the Philippines

are, rapid population growth, lack of quality education, and environmental factors. The

government has to lend a hand to people and manage the financial system according to

the highest demands. Even if there is an Employment growth, it does not lessen the rate

of unemployment as the rapid population grows faster. There are ways to provide

solutions to these problems however our system of governance lacks a lot of things

which makes it more difficult. They provide solutions but only few individuals benefit

from it. There is no one to blame but the trash government system we have, even

though you have a high educational background you will still face disapproval and most

are being neglected because of their social standards. A huge set of changes needs to

happen in order for everyone to attain normal living with enough money to comprehend

their expenses.

References:

Felipe, J., & Lanzona, L. (2006). Unemployment, Labor Laws, and Economic Policies in
the Philippines. In Labor Markets in Asia (pp. 367-502). Palgrave Macmillan, London.
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Brooks, R. (2002). Why is unemployment high in the Philippines?.

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