Philippine growth hit by high jobless rate

Unemployment rate in the Philippines stood at 7% despite the “robust” economic growth in the past two years, the International Labour Organisation (ILO) said in its Global Employment Trends 2014 report.

About 11% of the nation’s workers are classified under “extremely poor” or individuals living on less than $1.25 a day, or about P55 a day.

The country recorded over 6.8% growth in 2012 and 2013, but the ILO said “job growth has been subdued and the unemployment rate” remained at a high of 7% in both years.

This is relatively high compared with the rest of the Southeast Asian region.

In most of Southeast Asia, the unemployment rate has a downward trend — from an average of 6% between 2000 and 2008, to around a projected 4.5% in the next few years.

The unemployment rate for both genders in the country also remained higher than the average rate of the Southeast Asian region.

“Women in the region face slightly higher chances of unemployment than men,” the ILO said.

There is a 4.4% unemployment rate for women in the region while 4.1% was recorded for men. In Indonesia, for example, the unemployment rate for women in May last year was 6.3% compared with 5.5% for men.

However, the Philippines had higher unemployment rate for both genders last year—7.2% for women in July 2013 and 7.3% for men.

Another major challenge for the region is the estimated youth unemployment rate of 13% in 2013.

That rate is three times of the total unemployment rate, and approximately five times that of the adult unemployment rate.

“Given the young demographic profile of many of the countries in the region, adequately equipping youth with education and skills and enabling youth to obtain productive jobs that have upward earning prospects are likely to remain key policy concerns,” the ILO said in the report.

But because the Philippines is part of the Association of Southeast Asian Nations (Asean) Economic Community 2015, it will be presented with both opportunities and challenges “in terms of growth prospects across different sectors, shifting trade patterns, the need to nurture comparative advantage within each country, skill mismatches and their implications for the labour market.

“In particular, a freer flow of labour is envisioned within the Asean community, signalling both new opportunities and challenges for jobseekers.”

Asean is composed of the Philippines, Singapore, Vietnam, Thailand, Indonesia, Malaysia, Laos, Cambodia, Myanmar and Brunei Darussalam.

ILO has predicted that in Cambodia, Laos, Malaysia and the Philippines, the labour force growth will continue to grow “relatively rapidly at well above 1.5% per year.”

The Philippines has an average annual labour force growth rate of 2.46% from 2010 to 2014 and a predicted 2.31% from 2015 to 2020.

In Myanmar, Singapore, Thailand and Vietnam, there will be a “notable slowdown” in labour force growth to less than 1% a year.

The disparity in labour force growth and diverse employment opportunities within the region, as well as the differences in income, will create “push and pull factors” for workers “to move across borders.”

To benefit Asean economies and workers, ILO is recommending an improvement of the labour market information systems, cross-country skills recognition framework and job placement mechanisms.