Unemployment a ‘time bomb’ for RP, warns ADB

UNEMPLOYMENT in the Philippines is a “time bomb” with about 52 million Filipinos expected to seek jobs by 2030, according to a study by the Asian Development Bank (ADB).

The study, made by Jesus Felipe, ADB principal economist in the Philippines, projected that the 2005 labor force of 34 million will increase by about 50 percent, or to 52 million by 2030.

As of January this year, around 38.8 million persons were reported to be in the labor force, according to the National Census and Statistics Office.

“The question for the Philippines is: Will the economy be able to provide jobs for all these people?” Felipe asked.

He noted that while unemployment and underemployment are the major causes of poverty in developing Asia, policymakers in the region do not consider them the No. 1 problem. He maintained that employment is a basic right, and full employment should be the primary objective of economic policy in the developing Asia.

Felipe cited numerous “wrong directions” taken by policymakers in creating employment.

“For decades, growth and low inflation were thought to lead to job creation. Policymakers have been concerned with controlling inflation and the fiscal deficit, which in turn, were thought to create stability and employment. This approach is incorrect,” he argued.

Felipe said that rather than slashing budget deficits to control inflation, policy makers should redirect fiscal and monetary policies to achieve full employment with price stability.

He added that skills mismatch and the lack of human capital are the most commonly cited reasons for unemployment.

“In reality, it is the systemic failure of the economy to create enough jobs that is the main cause of massive unemployment,” Felipe said.

He urged the implementation of population management and job guarantee programs to achieve full employment.

Felipe said that industrialization policies are also crucial but that education, while it matters for long-term growth, it is not a key constraint now.

“Individuals cannot be left out [of employment] and stigmatized for being uneducated,” he added. A full employment economy offers a great number of advantages.

Felipe said that the best way for an individual to participate in society is through productive and decent employment. For society as a whole, employment results in a reduced need for social safety nets, lower social costs and higher political stability. –DARWIN G. AMOJELAR Senior Reporter, Manila Times