Reaction Paper I

PHILIPPINES STRUGGLES WITH UNEMPLOYMENT DESPITE ECONOMIC GROWTH: (By Felipe Salvosa)

A REACTION PAPER

A Reaction Paper Submitted to: Prof. Gladys Florangel I. Ortiz In Compliance with the Requirement for GM 205 Development Perspective

Submitted by: Amelia C. Bibera MSERM November 28, 2015

“PHILIPPINES STRUGGLES WITH UNEMPLOYMENT DESPITE ECONOMIC GROWTH” (by Felipe Salvosa)

A REACTION PAPER

Motoo Konishi, World Bank Country Director for the Philippines opined that “The Philippines is no longer the sick man of Asia, but a rising tiger.” 1 The statement refers to the fast growing economy of the Philippines. The truth of our rising economy is echoed in the article of Mr. Felipe Salvosa in the “Emerging Markets”

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dated September 1, 2015 which is the subject of this Reaction Paper. In fact Mr. Salvosa described the growth not just a mere growth but a “rapid economic growth”. Mr. Salvosa, a Philippine Researcher at Financial Times Confidential Research with eleven (11) years and eight (8) months as reporter, editor and reaserach head of BusinessWorld Publishing Corporation, has a lot of experience and exposure to back up his statement. Yet, worthy to note is the fact that he juxtaposed a rapid economic growth with the “highest rate of unemployment in the Asean Region”. Mr. Salvosa points out that one reason for the disparity is that “job creation has struggled to keep pace with an ever-expanding population”. Another factor is that participation in the labor force remains relatively low because of the high values set on further education in the Philippines as well as the low quality of jobs available. In my opinion, there is indeed a painful truth in the article, that is, there is a wide chasm between the rising economy and the corresponding rising rates of unemployment. 1 “Will the Philippines Finally Become an Asian Tiger Economy?”, Philnews.com Uniting the Global Filipino. http://www.philnews.com/2013/02a.htm 2 http://www.ft.com/cms/s/3/a381f48c-4bf9-11e5-b5588a9722977189.html#axzz3sleFsvn7

The Philippine population as of July 27, 2014 had reached more than 100 million3 and it is continuing to rise. Despite the continued pouring in of investment in the country, such as Atlanta-based The Coca Cola Co. Which is investing $ 1.2 billion up to 2020 to expand its facilities and beef up distribution and operations 4; independent oil player

PTT Philippines is pouring in P 450-million worth of

investment this year5, the Japanese, the Dutch and other investors investing in the Philippines, the rate of unemployment is still at 6.4% making us the highest in Asia because these investors would only generate a few jobs. From my point of view, realistically speaking, it would really be next to impossibility to create millions of jobs to cater to the million populace. Take into account the number of graduates we have every year. Last year alone, data from CHED shows that 553,706 college students graduated 6. There can never be a one to one matching of graduates and job opportunities. If every year, half a million students graduate, then every year, half a million jobs must be generated. No such scenario happens or is about to happen. Because of the scarcity of jobs, the competition, nowadays, has become tougher, thus

more

and

more

graduates

take

further

studies

such

as

Master’s

Degree/Doctorate Degree or a second course. This is one of the reasons why there 3 100 hundred million". ALFREDOPALCONIT. Retrieved 25 October 2014 4 PhilStar, August 20, 2015, “Coca-Cola Pouring in Addtional $ 1.2 B in the Philippines” by Richmond S. Mercurio, http://www.philstar.com/business/2015/08/20/1489923/coca-cola-pouringadditional-1.2-b-philippines 5 The Manila Times, May 27, 2015, “PTT Philippines Pouring in P 450 Millio for Expansion” by Ritchie A. Horario, http://www.manilatimes.net/ptt-philippinespouring-in-p450m-for-expansion/186963/ 6 PhilStar, March 26, 2014, “553,706 College Students to Graduate” by Helen Flores http://www.philstar.com:8080/headlines/2014/03/26/1305213/553706college-students-graduate

is a low participation rate in the labour market. Flipinos tend to spend more time in the university to have a better prospect of landing a good paying job. However, there are still those, who despite being equiped with all the necessary credentials, still have not landed a job. Hence, because of the necessity of earning money to support the family, they would settle for underemployment or accept jobs with lesser qualification standards with lesser renumeration. Some also have opted to seek their fate in other countries disregarding loneliness, homesickness and the possibility of meeting harsh employers or even death. One solution mentioned in the article is ramping up employment in the manufacturing but this is also hindered by issues such as demand for higher wages, limited infrastructure and red tape. Manufacturing industry, although it generates a lot of jobs, would mostly cater to the Class D and E with meager number catering to the A, B and C. In sum, yes, we are growing economy wise but so is our population and the end result is a higher rate of unemployment. CONCLUSION Basic is the fact that Filipinos are known for being industrious and hardworking. This innate nature of ours are stunted because we are not given the opportunity to shine. If only all Filipinos will have the mentality of the Chinese, who send their children to school not to be gainfully employed but to manage the family business. If only those working overseas would save more so that they can put up a business thereby employing other Filipinos. If only one out of ten Filipinos would put up a business that can employ at least 5 Filipinos, hence leaving only 4 Filipinos seeking jobs in the market. If only industries such as mining would be allowed to fully operate without being a source of grease money for some corrupt officials. All this would lessen the unemployment and even further increase the economic growth of the Philippines. But as I have stated.... IF ONLY.....