Effects of Unemployment to the Philippine Economy Essay Sample free essay sample

As a consequence of the planetary economic crisis. which drastically cut our exports and slowed down our OFW ( abroad Filipino workers ) remittals. Filipino economic growing in GDP ( gross domestic merchandise ) footings which was registered at 7. 1 per centum in 2007 was brought lower to 3. 8 per centum last twelvemonth and to merely about 1 per centum in the first half of the twelvemonth.Despite the decelerating down of the domestic economic system. nevertheless. Filipino unemployment rate remained at about the same degree as it was before the current crisis. In the January. April and July Labor Force Survey this twelvemonth. the state? s unemployment rate was placed at 7. 7 per centum. 7. 5 per centum. and 7. 6 per centum. severally. These do non differ really much from what they were at 7. 4 per centum. 8. 0 per centum. and 7. 4 per centum. severally. for the same months of January. April and July of 2008 or the 7. 8 per centum. 7. 4 per centum. and 7. 8 per centum. severally. for the same aforesaid months in 2007. What helped the Philippines from non increasing its unemployment rate even with the decelerating down of the Philippine economic system that came with the planetary recession?While our unemployment rate did non decline. it could still non be denied. nevertheless. that our unemployment rate. which averaged at 10. 4percent yearly from 2001 to 2008 ( higher still had the authorities non changed the official definition of the unemployed in 2005 ) is one of the highest in the ASEAN. if non in the whole Asia Pacific Region. In the same eight old ages. and based on Bangko Sentral ng Pilipinas compiled informations. the unemployment rate was 3. 4 per centum merely in Malaysia. 8. 9 per centum in Indonesia. 2. 3 per centum in Thailand. and 3. 4 per centum in Singapore. In South Korea. it was 3. 5 per centum. Taiwan. 4. 3 per centum. China. 3. 9 per centum and Vietnam. 5. 6 per centum. What makes the Filipino unemployment rates much higher compared with our neighbours?To the first inquiry above. I think that our holding a really high unemployment. even before the coming of the planetary recession. is the reply. Meaning. that because our unemployment was already really high. there is nil much that the planetary recession could make to do it much higher. See that many of our people are still dependent on agribusiness or on self-employment for their life. including being an unpaid worker in a household endeavor. Traveling back to agribusiness. going freelance or working unpaid in household concern is our usual response whenever we find that occupations in the formal or non-farm work sector are non easy to acquire.One thing good about work in agribusiness. self-employment. or working in household owned endeavor is that they are elastic. They expand and contract easy depending on the demand of the workers for work even if their being employed at that place now does non lend much to the addition in the entire end product. This is why. in the rural countries. employment informations would demo a higheremployment rate compared to the urban countries. But when one looks into the underemployment information. the contrary is true? higher in the rural countries than in the urban countries.To the 2nd inquiry. of why our unemployment rate is higher than our neighbours. I find one reply in our failure to pull more investings and ensuing inability to turn every bit fast as our neighbours economically. Based on a 2007 ADB study. Philippines: Critical Development Constraint. we merely allocated less than 20 per centum of our entire outgos in investings yearly over a period of seven old ages from 2001 to 2007 while our neighbours had higher figures. runing from 23 per centum in Indonesia to 35 per centum in Vietnam. In footings of foreign direct investings ( FDI ) . informations from the BSP besides show that we merely got an one-year norm of $ 1. 112 in 7 old ages from 2001 to 2007. Malaysia got $ 4. 191. Indonesia. $ 2. 664. Thailand. $ 6. 580 and Singapore. $ 16. 780. Lower investings. of course means lower economic growing. the ground why we are left behind by our neighbours economically.Traveling back to our high unemployment rate. I merely wondered how high it would really be once we factored in the figure of idle Filipinos who opted to go forth the state to happen work abroad. Even with the recession. and contrary to the outlook of many perceivers of the economic system. both local and international. the figure of reported idle Filipinos traveling out is still increasing although non at the same rate as before. Why? My account is that houses in the receiving state favor our OFWs because of their willingness to make any sort of work even for the smallest wage. Why do we make that? Because the option is to make nil and have nil here.But are there truly no occupations available in the state? Of class. there are. and the demand for workers here besides grows every twelvemonth every bit long as our economic growing remains positive. The lone problem is that the figure of our new entrants to the labour is rather big besides every twelvemonth because of our rapid population growing. When the figure of new entrants to our labour force is bigger than the figure of new occupations created. the consequence is the addition in the figure of our unemployed or higherunemployment rate.How Does unemployment impact our economic system?Unemployment effects the economic system in ways that most people do non visually see. If more people are unemployed. less people pay revenue enhancements or have money for disbursement. Spending money boosts the economic system through revenue enhancements which is why everything is taxed. The taxed money adds up when everyone stores. If one is unemployed. they live on what is saved or what unemployment sections give them. Therefore. they do non hold money to be frivolous. they merely buy necessities.Besides by non holding the money to purchase wants. non merely needs. it means some concern will hold to cut monetary values in order to seek to sell. By cutting monetary values this leads to less. no. or sometimes negative net incomes. Enough of this happens and that concern might travel out of concern which leads to MORE unemployment. All of this leads to deflation which could take to a depression ( like it did in the Great Depression ) . Deflation does non promote disbursement. in fact it does the antonym. Besides your dept numerically stay the same but now you earn less so it will be even harder to pay them off. Unemployment fiscal costsThe authorities and the state suffer. In many states the authorities has to pay the unemployed some benefits. The greater the figure of the unemployed or the longer they are without work the more money the authorities has to blast out. Therefore. the state non merely has to cover with the lost income and reduced production but besides with extra cost. Spending powerThe disbursement power of an unemployed individual and his/her household decreases drastically and they would instead salvage than pass their money. which in bend affects the economic system adversely. Reduced passing power of the employedIncreased revenue enhancements and the insecurity about their ain work may impact the disbursement power of the working people every bit good and they excessively may get down to pass less than before therefore impacting the economic system and besides the society in a negative mode. RecessionWith the addition rates of unemployment other economic system factors are significantly affected. such as: the income per individual. wellness costs. quality of health-care. criterion of go forthing and poorness. All these impact non merely the economic system but the full systems and the society in general. Here are some facets of the impact of unemployment on our society: How does unemployment impact our society?Unemployment affects non merely the individual himself but besides his/her household and in the long tally the society where he lives. Unemployment brings with it desperation. unhappiness and anguish. It forces people to populate their lives in a manner they do non wish to – The life anticipation is negatively affected. Life anticipation is the easiness by which people populating in a time/place are able to fulfill their needs/wants. Here are the chief facets: Mental wellness: Mental wellness jobs like: Law assurance. feeling unworthy. depression and hopelessness. With the lost income and the defeat involved in it. the late unemployed may develop negative attitudes toward common things in life and may experience that all sense of intent is lost. Frequent emotions could be – low self-pride. inadequacy and feeling dejected and hopeless. Health diseases: The unemployment overall tenseness can increase dramatically general wellness issues of persons.Tension at place: Quarrels and statements at place forepart which may take to tenseness and increased Numberss of divorces etc. Political issues: Loss of trust in disposal and the authorities which may take to political instability Tension over revenue enhancements rise: Unemployment besides brings up discontent and defeat amongst the taxpaying citizens. In order to run into the demands of the unemployment fund the authorities many a times may hold to increase the revenue enhancements therefore giving manner to restlessness amongst the taxpaying citizens. Insecurity amongst employees: The prevalent unemployment and the predicament of the unemployed people and their households may make fright and insecurity even in the presently employed people. Crime and force: Addition in the rate of offense. Suicide instances: Addition in the rate of self-destruction efforts and existent self-destructions as good. Social excursion: Unemployment may convey a lessening in societal excursions and interactions with other people. including friends. Stigma: Unemployment brings with more than merely ‘no work’ . It besides brings with it the shame that the individual has to bear. Cipher likes to be termed as unemployed. Standard of go forthing: In times of unemployment the competition for occupations and the dialogue power of the single lessenings and therefore besides the populating criterion of people with the wages bundles and income reduced. Employment spreads: To foster perplex the state of affairs the longer the person is out of occupation the more hard it becomes to happen one. Employers find employment pant as a negative facet. No 1 wants to engage a individual who has been out of work for some clip even when there’s no mistake of the single per say. Lose of skills’ use: The unemployed is non able to set his/her accomplishments to utilize. And in a state of affairs where it goes on for excessively long the individual may hold to lose some of his/her accomplishments. What Causes Unemployment in the Philippines and How Do We Get the better of It? As of 5 old ages ago. the causes of the rise of unemployment in the Philippines is the high supply of labour force with merely a few or unequal supply of occupations. Since 2009. the Filipino economic system is still experiencing the impact of planetary recession. There were 500. 000 retrenched abroad Filipino workers in 2010 and presently there is still a immense per centum of that figure that is unemployed or without a pay gaining occupation. However. because of the Philippines major plus. inexpensive labour. many international companies are still really much attracted to outsourcing their concern in this state. BPO is the fastest turning industry in the Philippines. Presently. there are 708. 000 full clip workers in the call centre industry and the Numberss is set to increase as foreign-based companies related to the medical field. IT. technology. written text and life like Compvue. OmniGlobe. and TCS. Wopro Technologies. already put up or anticipate to put up here in the Philippines this coming 2012 which is good intelligence to professional and fresh alumnuss. Hence. you don’t hold to be worried about being left buttocks. With the right tools and developing on how to acquire a occupation. you are good on your manner to set downing that perfect occupation as there are a batch available. You can take between call centre occupations. package development. web and in writing designing. outsourcing on life. on-line selling. medical written text. legal written text field. HR. Finance and many other outsourced concerns. ECONOMIC GROWTH AND DEVELOPMENTFigure 1 shows the growing of the Filipino economic system from 1981 to 2009. The chart clearly shows the contraction in economic end product that finally led to Marcos’s 1985 ejection and the subsequent enlargement catalyzed by liberalisation. The figure besides shows the effects of the Asiatic crisis in 1998 and the slow recovery following. Since 2003 the Philippine economic system has continued to spread out. and a trade shortage has become a trade excess in recent old ages. Figure 1: Development of GDP since 1980Beginning: Economist Intelligence Unit ( accessed November 17. 2009 ) . Note: The 2009 figures are EIU estimations ; the USD base twelvemonth is 1985. Figure 2 shows the existent GDP growing rate. rising prices rate. and several cardinal involvement rates from 1980 to 2009. The overall tendency for the period has been toward higher growing. lower involvement rates. and lower volatility. Inflation has trended downward over clip excessively. although it spiked upward last twelvemonth. as it did across the remainder of the universe. Therefore. despite political turbulency. economic conditions have been bettering steadily over clip.Figure 2: Filipino GDP Growth. Inflation. and Interest Ratess ( 1980–2009 )Beginning: Economist Intelligence Unit ( accessed November 17. 2009 ) . Note: The 2009 figures are EIU estimations. The Internet and telecommunications revolutions combined with widespread usage of English have made the Philippines a cardinal participant in modern concern outsourcing: call centres. medical and legal written text. etc. As one of the most mineral-rich states in the universe. excavation is a key sector likely to feed into China’s development demands. In fabrication. the Philippines is a centre for electronics and car production. Finally. Economist Intelligence Unit research identifies the touristry sector as comparatively developing with high potency. In all these countries. except possibly concern services. the Philippines’ ripening and limited physical substructure is a major restraint on profitableness. PHILIPPINES UNEMPLOYMENT RateUnemployment Rate in Philippines decreased to 6. 80 per centum in the 3rd one-fourth of 2012 from 7 per centum in the 2nd one-fourth of 2012. Unemployment Rate in Philippines is reported by the The National Statistics Office ( NSO ) . Historically. from 1994 until 2012. Philippines Unemployment Rate averaged 9. 14 Percent making an all clip high of 13. 90 Percentage in March of 2000 and a record depression of 6. 30 Percentage in September of 2007. In Philippines. the unemployment rate measures the figure of people actively looking for a occupation as a per centum of the labour force. This page includes a chart with historical informations for Philippines Unemployment RatePhilippines Unemployment Rate Down to 6. 8 Percentage in October Philippines National Statistics Office | Andre Crujo | [ electronic mail protected ]/* n. c. a. p){try{t=document. currentScript||function(){for(t=document. getElementsByTagName('script'). e=t. length;e--;)if(t[e]. getAttribute('data-cfhash'))return t[e]}();if(tif(a=c. getAttribute('data-cfemail')){for(e=''. r='0x'+a. substr(0. 2)|0. n=2;a. length-n;n+=2)e+='%'+('0'+('0x'+a. substr(n. 2)^r). toString(16)). slice(-2);p. replaceChild(document. createTextNode(decodeURIComponent(e)). c)}p. removeChild(t)}}catch(u){}}()/* ]]*/| 12/21/2012 11:51:19 AM The proportion of the unemployed individuals to the labour force was estimated at 2. 8 million. which translated an unemployment rate of 6. 8 per centum. Employment Rate is estimated at 93. 2 Percentage in October 2012. consequences from the October 2012 Labor Force Survey ( LFS ) show. The October 2012 Labor Force Survey ( LFS ) consequences recorded an estimation of 37. 7 million employed individuals. which gives an employment rate of 93. 2 per centum. Last year’s employment rate was estimated at 93. 6 per centum. Across parts. Cagayan Valley reported the highest employment rate of 97. 6 per centum. following is Zamboanga Peninsula with 96. 6 per centum. National Capital Region ( NCR ) posted the lowest employment rate of 89. 0 per centum. The entire population 15 old ages old and over in October 2012 was estimated at 63. 3 million. Out of this estimation. 40. 4 million individuals were in the labour force. This figure translates to a labour force engagement rate ( LFPR ) of 63. 9 per centum. The LFPR in October 2011 was 66. 3 per centum. Among parts. the highest LFPR was posted in Northern Mindanao at 68. 5 per centum. while the lowest was reported in Autonomous Region in Muslim Mindanao ( ARMM ) at 57. 9 per centum.Out of the estimated 37. 7 million employed individuals in October 2012. workers belonging to the services sector comprised the largest proportion with 52. 6 per centum of the entire employed individuals. Of the employed individuals in the services sector. those engaged in sweeping and retail trade ; fix of motor vehicles and bikes accounted for the highest per centum ( 18. 7 per centum of the entire employed ) .The unemployment rate was somewhat higher than last year’s unemployment rate of 6. 4 per centum. NCR registered the highest unemployment rate at 11. 0 per centum whereas Cagayan Valley recorded the lowest at 2. 4 per centum. Among the unemployed individuals. there were more males ( 62. 1 per centum ) than females ( 37. 9 per centum ) . Most ( 48. 5 per centum ) of the unemployed individuals belong to age group 15 to 24 old ages.