A labor force survey made by the National Statistics Office ( NSO), a government agency, showed that for the month of July, an estimated 2.8 million Filipinos were unemployed. This translates into an unemployment rate of 7.1 percent. Last year's estimated unemployment rate was 7 percent, with almost 2.71 million unemployed. The number of underemployed Filipinos in July was estimated at 7.1 million, placing the underemployment rate at 19.1 percent.
Analysts say that the high unemployment and underemployment rates were expected because of the continued economic slowdown in the first half of the year. This was compounded by the failure of the Aquino administration to spend what was already programmed in the national budget, especially for infrastructure projects, that could have generated thousands of jobs.
A report by the Bangko Sentral ng Pilipinas (BSP), the country' s central bank, also said that more Filipino consumers have turned pessimistic in the third quarter than last year as domestic households, particularly those relying on remittances, felt the weight of unfavorable economic developments abroad.
The BSP said that consumer sentiment also declined as the euphoria over the entry of the new administration last year gradually diminished while economic challenges started to kick in. According to the results of the BSP's third-quarter Consumer Expectation Survey (CES), the confidence index of Filipino consumers reached -18.7 percent, deteriorating from the -14 percent registered in the same period last year.
A negative index means respondents who say they are pessimistic about their income and growth prospects of the economy outnumber those who believe otherwise. The latest CES, conducted from July 1 to 14, covered 5,658 households nationwide, with a response rate of 97.4 percent.
Teresita Deveza, acting deputy director for the department of economic statistics of the BSP, said Thursday that the consumer confidence index in the third quarter, compared with that of a year ago, began to decline when the euphoria of Filipino consumers over the 2010 elections wore off. "Last year was an election year, and people had very high expectations from the new government. Then, the index went down; it was actually lower in the first two quarters of this year. But for the third quarter, it improved," Deveza said.
These negative factors in the economy have prompted the Asian Development Bank (ADB) to downgrade its full-year growth outlook for the Philippines from 5 percent it forecast in April to 4.7 percent.
In a presentation last Wednesday, ADB senior country economist for the Philippines Norio Usui said its lower growth outlook took into consideration the subdued government spending, lower than expected export growth, less private spending as reflected in poor auto sales, and a drop in private construction in the second quarter.
The Manila-based lending institution said that the government's spending slowed in the first semester as public agencies took a more cautious stance amidst an anti-corruption drive initiated by the administration of President Benigno S. Aquino III.
The Philippine economy grew only by 3.4 percent in the second quarter, down from 4.9 percent in the first quarter and from 8.2 percent in the same quarter last year.
Merchandise exports also fell for the third straight month in July due to the weakness in the electronics sector. The Philippines shipped out $4.43 billion worth of goods, down 1.7 percent from the previous level of $4.505 billion. Electronics products, the country's main export item, shrank 21.3 percent from last year, also the third month in a row of over 20 percent decline.
The ADB noted that net portfolio investments in the first seven months of 2011 remained high, helping push stock prices to record highs in August, but foreign direct investment remains subdued because of the delays in the implementation of the public-private partnership(PPP) program of the Aquino administration. Actually, the net inflow of portfolio capital to the country from January to August totaled $3.1 billion, more than triple the $926 million recorded in the same period in 2010.
For 2012, the ADB said that increased investments and resilient consumer spending will help economic growth to pick up. Inflation forecasts are retained at 4.9 percent for 2011 and 4.3 percent in 2012, assuming that global oil and food prices moderate as expected. The ADB also maintained that the first semester of 2012 will outperform this year's first-half performance. It has retained its 5.1 percent full-year growth outlook for the Philippines in 2012.
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My understanding about this issue is that our economy is facing unemployment. With the inevitably growing population of the Philippines we cannot avoid that from time to time, the unemployment rate in the Philippines rises. As the unemployment rate increases, there are disadvantages that will affect our economy. Like, more people will encounter poverty and because of this, people might engage into crimes and lead to do illegal activities such as drugs. I believed that one factor why unemployment exist in the Philippines is because of corruption of those who are in the government. They should stop the corruption and do everything they have to solve this problem because if this unemployment rate keeps increasing, there will be no more country who will want to trade or invests in our country for business. And if this will happen, they cannot provide good jobs for us Filipinos especially those fresh graduates. In order to decrease the unemployment rate, government should have infrastructure projects that could have generated thousands of jobs and they should have a good reputation, in order to other countries will engage business in our country.
