Friday Jan 02nd Unemployment to hit 8% to 9% in 2009
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Written by Cai U. Ordinario / Reporter
A SLOWER economy will force private companies to lay off more workers next year, which could result in an unemployment rate ranging from 8 percent to 9 percent in the Philippines in 2009.
The government recently downgraded the country’s gross domestic product (GDP) growth next year to 3.7 percent to 4.7 percent from the last Development Budget Coordination Committee forecast of 4.1 percent to 5.1 percent.
With this, state-owned think tank Philippine Institute for Development Studies president Josef Yap said, on the sidelines of the 46th Annual Meeting of the Philippine Economic Society, that the unemployment level in the country will not be in double digits but will just be slightly lower at around 8 percent to 9 percent.
In October 2004, the National Statistics Office (NSO) reported that based on the old definition of unemployment in the country, the number of unemployed in the Philippines at that time was 10.9 percent.
In that year, the country adopted International Labor Organization (ILO) standards in reporting labor force statistics. Under the ILO definition, those who are unavailable to do work would no longer be classified as unemployed.
This reduced the number of unemployed persons in the country. In October 2004, while the Philippine definition showed unemployment rising to 10.9 percent, the ILO standards only showed unemployment at 7.1 percent.
Director Dennis Arroyo of the National Economic and Development Authority (Neda) National Planning
and Policy Staff agreed with Yap and said that while 2009’s unemployment will be higher than this year and in 2007, it will not also reach 2004’s double-digit unemployment rate.
“The employment rate next year will slow down but it will not be catastrophic,” Arroyo said after the closing of the PES meeting at the Bangko Sentral ng Pilipinas on Friday.
However, whatever unemployment rate will be registered in the October 2008 round of the NSO’s Labor Force Survey could be a leading indicator of the level of unemployment the country will have next year, said the director.
And while the Neda does not give an official projection or estimate of the employment or unemployment level, the government will be studying the effect of the crisis on key areas such as the overseas Filipino workers (OFWs) sector.
Arroyo does not expect an increase in the number of OFWs who will become unemployed next year, because jobs overseas are less sensitive to recession.
The Neda official said most Filipinos employed in severely affected countries like the United States were somehow employed in indispensible areas of the work force. Meaning, since most Filipinos were employed as teachers, caregivers and nurses, they will be the last to be fired. Still, the crisis may cause a slowdown in the remittances they will send to their families here.
If these workers get fired, said Arroyo, countries in the Middle East can absorb them, and this includes even those workers who work in other sectors like construction, who will be fired from crisis-affected countries.
Oil economies—Saudi Arabia, Dubai and Oman, for example—are now spending the profits they have earned through years of drilling and selling oil in the international market on the construction sector.
“Even if the US economy tailspins, oil economies such as Saudi Arabia, Dubai and Oman will compensate. They are now investing in heavy construction,” Arroyo said.
The NSO reported the July unemployment rate was at 7.4 percent compared with 7.8 percent in July 2007. Among the regions, the highest unemployment rate was in Metro Manila, at 12.8 percent.
The number of unemployed was higher among males (61.7 percent) than females (38.3 percent). By age group, for every 10 unemployed persons, five or 51.8 percent belonged to the age group 15 to 24 years, while three or 28.5 percent were in the age group 25 to 34.
Across educational groups, among the unemployed, high-school graduates comprised more than one-third or 34.1 percent; college undergraduates comprised about one-fifth or 20.8 percent; and college graduates, 19.5 percent.
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