Jobless rate will not hit 10%

Published by rudy Date posted on February 14, 2009

An official of the National Economic and Development Authority said unemployment rate in the Philippines will not hit a double-digit rate this year, despite the global economic slowdown that forced electronics companies to shed jobs.

Neda policy and planning director Dennis Arroyo said job losses, stemming from the global financial crisis, would be between a low of 40,000 and a high of 200,000 workers.

“That’s the range for the whole year, a big range. Definitely, it will raise the unemployment rate,” he said, but not enough to push unemployment rate to 10 percent.

The unemployment rate for October 2008 was recorded at 6.8 percent.

Arroyo said the issue is being addressed by the Labor Department by shifting migrant Filipino workers from countries with weak demand to those with strong demand.

“The Middle East countries are responding to the crisis by pump-priming and spending on infrastructure projects. That will boost OFW unemployment in construction. There are also new markets in Guam, New Zealand and South Australia,” he said.

Arroyo said the gross domestic product growth momentum would continue in 2009, and was not likely to fall below the low-end target of 3.7 percent this year.

“The crisis began in September and hit hard in October, November and December. Hence, the fourth quarter of 2008 was already in the crisis era. Yet, the economy still grew by 4.5 percent,” Arroyo said.

He said the 2009 GDP growth target range of 3.7 to 4.7 percent assumed a merchandise export growth of 1 percent to 3 percent.

Arroyo noted that in the fourth quarter of 2008, exports declined 9.2 percent.

“One would have expected the economy to post growth lower than 3.7 percent. But what happened was that manufacturing for the domestic market compensated for the drop in exports,” he said.

Manufacturing growth accelerated to 3.2 percent in the fourth quarter of 2008, from 2.6 percent in the fourth quarter of 2007.

The growth was buoyed by food manufacturing, beverage, chemicals and chemical products.

Arroyo said the drop in fertilizer and fuel prices would boost production in the agriculture, fishery and forestry sector.

He said he expects more delays in mining projects due to “hesitance to invest” amid the global crisis.

Manufacturing, he said, will be dragged by exports but eventually will shift to the domestic economy. There will also be a big public construction push, positive response from private construction, power sector reforms and expansion of water service areas.–Roderick T. dela Cruz, Manila Standard Today

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