An Analysis Paper on Unemployment Rate in the Philippines

A Requirement Paper for the Midterm Period on “The Contemporary World”

Submitted by: Group # 2

Leader:

Moina, Rosemarie

Members:

Alindayu, Andrea Luis, Kyle

Borja, Richard Maata, Joann

Cabalitan, Josephine Padilla, Catherine

Castisimo, Georgette Salvador, Aubrey

Espiritu, Manny Sustiguer, Rowena

Gonzales, Thea

BSA – 1A

Submitted to:

Prof. Carmelita C. Kilala

Objectives

1. To determine the main reason of unemployment rate in the Philippines.

2. To know the major effects or impacts of unemployment rate in the Philippines.

3. To find solution to the unemployment rate in the Philippines.

I. Abstract

This analysis paper aims to determine the main reason of unemployment in the

Philippines and also the effects of having high unemployment rate and possible

solutions on how to solve the problem with regards to this. The qualitative data were

acquired from different articles and prior researches that also discussed about

unemployment rate of the country. According to the results and findings, unavailability

of jobs is the main reason of having unemployment rate. Loss in national output,

increase in social cost and increase in tax rate are the major effects of having high

number of unemployed people. Another findings about possible solutions to solve

unemployment are retraining program for the unemployed, employment subsidies,

more assistance to self- employed businessmen and businesswomen, creating more

productive employment and population control.

II. Introduction

In a country with almost a 100 million people living in it, having a 9.1 million

unemployed citizens is a huge problem. According to the latest Social Weather

Stations (SWS) survey, 21.4 percent of the population declares themselves as

unemployed. In the Philippines, the unemployment rate measures based on two

criteria, either the person doesn’t have a job, or they are the people actively looking

for a job as a percentage of the labor force (except for housewives, students, retired

workers and disabled person who are considered to be not part of the labor force).

Unemployment indicates rising or falling of changing economic conditions. When the

economy is in poor shape and jobs are scarce, the unemployment rate can be

expected to rise. When the economy is growing at a healthy rate and jobs are relatively

plentiful, it can be expected to fall.

Starting April 2005, the new unemployment definition was adopted by NSCB

Resolution Number 15 dated October 20, 2004. As indicated in the said resolution,

the unemployed include all persons who are 15 years and over as of their last birthday

and are reported as: (a) without work and currently available for work and seeking

work; or (b) without work and currently available for work but not seeking work for the

following reasons:

1. Tired/ believed no work available

2. Awaiting results of previous job application

3. Temporary illness/ disability

4. Bad weather

5. Waiting for rehire/ job recall

Based on the recent unemployment rate survey conducted by Philippine

Statistics Authority (PSA), unemployment rate in the quarter of June 2018 dropped to

5.5 percent from 5.7 percent in April 2017 driven by higher employment in the
country’s three main economic sectors: agriculture, industry, and services. Among the

regions, Ilocos Region (7.3%), CALABARZON (6.6%), and NCR (6.4%) were the

regions with the highest unemployment rates. Furthermore, the number of

unemployed persons went down by 83 thousand to 2.36 million while the number of

employed increased by 625 thousand to 40.9 million. Meanwhile, the labor force

participation rate declined to 60.9 percent from 61.4 percent. The labor market

remains tight with the unemployment rate at around 5 percent, but the quality of

employment remains a concern.

Despite the fact that employment in the Philippines has been growing fast for

the past decade, still, many Filipinos are jobless. It proves that employment growth is

not enough to lower the unemployment rate given the high population growth and a

rise in labor force participation.

According to Cabegin, Dacuycuy, and Alba (2009), there are following types of

disadvantaged or unemployed workers: First, the ‘Openly Unemployed’ are the

persons without work during the reference period but are available and actively

seeking work, or those available but not seeking work because they are temporarily

sick or disabled, or waiting for rehire or the results of a job application. Second, the

‘Discouraged Workers’ are persons who are without work during the reference period

but are not seeking work because they believe that there is non-availability of the work.

Third, ‘Unemployed Persons’ are those who reported wanting additional hours of work

in the present job or in a new job or through an additional job. Fourth, the ‘Fully

Employed Vulnerable Workers’ are those who do not store the same entitlements as

protections accrued to regular workers under the Philippine Labor Code in respect to
working conditions such as security of tenure, wages and leave benefits, and the right

to collective bargaining. This kind of worker are classified into two: (a) The poor self-

employed and family- owned business workers and (b) short-term and intermittent

workers. Lastly, the ‘Labor Force’ is defined as the population between the ages of 15

and 64 who are either unemployed or employed in the domestic labor market or

overseas as contract workers.

Unemployment Rate in Philippines averaged 8.44 percent from 1994 until

2018, reaching an all-time high of 13.90 percent in the first quarter of 2000 and a

record low of 4.70 percent in the fourth quarter of 2016. In January 2018, net job

creation in all the three main sectors increased, generating about 2.4 million new jobs,

with an almost equal share from all three sectors. Workers in the services sector

comprised the largest proportion of the population who are employed. These workers

made up 56.4 percent of the total employed in April 2018. Among them, those

engaged in the wholesale and retail trade; repair of motor vehicles and motorcycles

accounted for the largest percentage (34.3%) of workers in the services sector. While

in April 2017, workers in the services sector accounted for 55.4 percent of the total

employed, with those engaged in the wholesale and retail trade; repair of motor

vehicles and motorcycles making up the largest proportion (35.3%) of workers.

Workers in the agriculture sector comprised the second largest group making

up 23.9 percent of the total employed in April 2018, while workers in the industry sector

made up the smallest group registering 19.7 percent of the total employed. In April

2017, workers in agriculture accounted for 26.1 percent of the total employed; while

workers in the industry sector, 18.5 percent. The April 2018 Labor Force Survey (LFS)
results also showed that in the industry sector, workers in the construction and

manufacturing subsectors made up the largest groups, accounting for 49.9

percent and 45.3 percent of the workers in these subsectors, respectively

Moreover, among the unemployed persons in April 2018, 62.7 percent were

males. Of the total unemployed, the age group 15 to 24 years comprised 45.8 percent,

while the age group 25 to 34, 30.2 percent. By educational attainment, 19.6 percent

of the unemployed were college graduates, 16.2 percent were college

undergraduates, and 28.9 percent have completed junior high school. Graduates of

junior high school includes those high school graduates in the old curriculum.

On the other hand, as the U.S. Bureau of Labor Statistics (BLS) notes, when

workers are unemployed, their families lose wages, and the nation as a whole loses

their contribution to the economy in terms of the goods or services that could have

been produced. Unemployed workers also lose their purchasing power which can lead

to unemployment for other workers, creating a cascading effect that ripples through

the economy. It also affects those who are still employed. When workers are let go, it

increases the amount of work those who are still employed have to cover. And

because unemployment usually increases when companies are trying to cut costs,

those expected to pick up the slack are not receiving any additional compensation for

extra hours worked. In fact, Dr. Richard Smith, a deputy editor of the British Medical

Journal, described unemployment as a `medical problem’. While unemployment has

been treated as an economic problem with political overtones, Smith’s description

reflects a growing recognition of unemployment’s impact on the health and welfare of

individuals and their social groups.

 The consequential associations with unemployment can be categorized into

the psychological, the social, and the economic. The most spectacular of all

the psychological associations is that the rate of suicide appears to be higher among

the unemployed. Therefore, to be unemployed is to lose latent functions and the

related social enjoyment of work, leading to poorer mental health. The social

consequences of unemployment are less well explored and more fragmentary. Some

of the research is supportive of the sorts of things to be expected given the

psychological and physical evidence – family stress, including violence and marriage

breakdown, and children with unemployed parents suffering from a deterioration in

health, behavior and educational attainment. The economic consequence of

unemployment is the loss of production.

This is only a proof that unemployment rate has an effect in economic status of

the country and especially to the wellness of an unemployed individual. This analysis

will be conducive to attain the major economic objective of the country in terms of

employment and to diminish consequential associations with unemployment such as

psychological, physiological, social and economic aspects.

III. Theory, Prior Research and Background

Reasons of High Unemployment Rate in the Philippines

Based on Central Intelligence Agency, some countries are still going through

the imminent problem of unemployment; just like the Philippines. In which despite the

progress it has showed on its economy, still the country’s unemployment rate ranks

the highest among its neighboring Southeast Asian countries. And in consonance with
what Nepomuceno-Rodriguez has cited in 2012, as per the Bureau of Labor and

Employment Statistics the unemployment figures for the Philippines in 2012 was

among the worst in Asia. Most of the unemployed in the Philippines were college

graduates (21.7%), college undergraduates (13.6%), and high school graduates

(32.8%).

There are major factors affecting the high unemployment rate in the Philippines

and according to the Central Intelligence Agency (2013), unavailability of jobs is the

most probable cause of unemployment in the country. With a population growth rate

of 1.84%, it is estimated that in the near future the country’s population will go up to

105 million; and population growth that would lead to overpopulation directly

encouraged the unemployment by increasing the labor force. There are millions of

people who needs a job and only few can provide one. Thus the growth of population

has created obstacles in the way of first growth of the economy and underdeveloped

the growth of job opportunities. Unfortunately, Philippines has a high total of

dependency ratio rate of 61.4%: and with accordance to the Vicious Circles of Poverty

Theory, poorest countries tend to have the highest dependency ratio, that is, the

percentage of population that is not of working age.

Moreover, the lack of quality education also contributes to the factors affecting

the unemployment rate in the Philippines (Central Intelligence Agency, 2013). It is

difficult to find jobs when an individual is not a graduate of particular skill or profession

due to the increasing demand of the fast developing world. The country faces a

competitive world and it is a must to reach the norms of development. Hence, to uplift
the unemployment rate in the country; high educational attainment is the one of the

most probable way.

Additionally, environmental factors serves as one the many causes of

unemployment particularly in our country. As per Central Intelligence Agency World

Fact Book, 2% of the labor force in the Philippines is in agriculture. However,

according to The World Bank (2013), Philippines is one of the most hazard-prone

countries in the World; and also sits along the Pacific Ring of Fire, an area prone to

typhoons, floods, earthquakes, drought, and volcanic activity. As a result, the

aftermath of these calamities heavily affects the labor force of the country. With that

in consonance to Central Intelligence Agency (2013) in the year 2012, 15% of labor

force comes from industrial sector and a high percentage is coming from the

agricultural sector with a 32%.

In the year of 1994 up to 2015, the average rate of unemployment in the

Philippines is 8.78%. Withal, the Philippine Institute for Development Studies cited that

in the Philippines, unemployment is a time bomb; and that between 2015 to 2030,

labor forces will increase from 32 million to about 52 million. In addition to that,

according to Jimeno (2016), there are greater number of employees who are unable

to take on available jobs because it is not connected with what they learned. This is

due to the serious disconnect between what schools teach and the demand in the job

market. Students are not acquiring skills they truly need to fill up available jobs when

they graduate. Aside from that, the Government itself, can be blamed as the real cause

of massive unemployment in the country. As it has failed to create the needed climate

to attract investors and, on its own, to create jobs.

 According to Jimeno, R. (2016). The Philippine Institute for Development

Studies said that in the Philippines, unemployment is a time bomb. Between 2005 and

2030, the labor force will increase from 32 million to about 52 million. Yet it is

befuddling why, in some sectors, there are many available jobs, but few qualify to fill

up the vacancies. In the food sector, for instance, there is a dearth of workers with

skills in cooking, food preservation, etc. Generally, companies have difficulty in

searching for accountants, bookkeepers, competent drivers, among others. In the

medical sector while there is a glut of nurses, there has been a shortage of CT scan

operators, cardio technicians, occupational therapists, respiratory therapists, etc.

According to Amadeo, K. (2018). A recession and the resultant cyclical

unemployment caused underemployment as well. When workers outnumber jobs,

they will take anything they can get to pay the bills. Technological change also causes

underemployment. For example, ATM machines have replaced the need for many

bank tellers. These used to be the entry-level positions for a career in finance and

banking. As a result, many college graduates who were finance majors take what they

can. They wind up as a home health aides, waiters or truck drivers. These positions

aren't easily replaced by computer technology.

According to Villanueva, J. (2016). In the Philippines, job-skills mismatch is one

of the causes of youth unemployment. Recent surveys reveal that Filipino youth

suffers the highest rate of unemployment among age groups. The International Labor

Organization estimates that unemployment rate among Filipino youth aged 15-24

averaged at 16.5% from 2010 to 2015.The situation prompted senator Joel Villanueva

to file Senate Resolution No. 129 directing the Committee on Labor, Employment and
Human Resources Development to review the state of job-skills mismatch in the

country.

There is a relation between recession and unemployment because recession

has a contagious effect or like a domino where increased unemployment leads to less

growth and a decrease in consumer spending that affects businesses, which could

lead to the layoff of workers due to losses. An economy that is experiencing recession

would decrease the business sales and revenues which may cause businesses to

stop expanding; and when the demand drop or not high enough, businesses start to

report losses and first try to reduce their costs by lowering wages or ceasing to hire

new workers in which resulting to an increase in unemployment rate (Mary Hall, 2018).

The following are some of the reasons that were considered as causes that

make the percentage of unemployment rate high:

 Oversupply of Labor Force on Popular Careers

The country’s education system continues to produce college graduates

whose skills don’t necessarily fit with what is in demand in the job market. When

nurses were in demand abroad in the earlier part of the decade, nursing schools

have mushroomed to accommodate growing demand for nursing education,

effectively leaving out other medical fields such as respiratory therapists, cardio

technicians and CT-scan operators that are also in demand abroad. As a result,

many nursing graduates fail to land their dream jobs.

University of the Philippines College of Nursing Dean Dr. Josefina Tuazon

explained that due to the numerous nursing graduates this year at 67,728,
hospitals have to get volunteer nurses — a lot better because they are not paid —

to accommodate the fresh graduates.

Philippine Nurses Association National President Leah Paquiz disclosed

that United States, almost home to 250,000 Filipino nurses in the past years,

stopped issuing work visas this year because the quota requirement for migrant

workers has already been reached. There were 21,000 Filipino nurses seeking

employment in the US in 2007.

 Lack of Quality Graduates

According to Lito Soriano of LBS-E Recruitment and executive director of

the Federated Associations of Manpower Exporters, over 2,000 nursing schools

have an annual total enrollment of over 420,000 students and each year, 100,000

new nurses take the board exams yet only 40 percent are able to make the grade.

More than 100,000 college graduates fail in qualifying board exams each year with

customs brokers and librarians posting the lowest passing rates.

While the number of board examinees is on the rise since year 2000, BON

member Marco Sto. Tomas said the passing rate exhibited a declining trend from

a high of 55.8 percent in 1998 to a low of 45.2 percent in 2006, or an annual

average of 49.5 percent. This year, only 39 percent of nursing licensure examinees

passed the board exam held last June 2009.

Citing a report by the Commission on Audit, out of 263 nursing schools

surveyed, only 111 had at least 50 percent of their graduates pass the local nursing
eligibility test from 2001 to 2005. The 2006 nursing board exam anomaly also

affected the confidence of foreign employers towards capability of Filipino nurses.

 Inability to Take on Available Jobs or Seize Opportunities

Because of lack of related skills and experience, jobless workers or fresh

graduates are unable to take on careers that are available in the job market. Some

would think it’s unimaginable to take a job that’s too unrelated to the course he/she

finished in college. With little or no entrepreneurial skills, many job hunters are

unable or unwilling to establish own business.

 Apparently Clueless Job Applicants

It’s hard, if not impossible, to land a job if an applicant doesn’t even know

where to start. Even if they’re looking at a job description, some of them are unable

to figure out how to fill up a form, how to use e-mail service or find the address of

the recruitment agency. A few would leave comments in a news article expressing

their interest. Anyone wants to see more proof? Have a look at the comments of a

past article about gas station attendant jobs in Dubai.

 Discrimination and Unreasonable Job Requirements

In the Philippines, a simple job vacancy gets way too many applicants. As

a way to pre-qualify applicants (or discourage those that are not fit), employers

have set requirements that are otherwise discriminatory and unreasonable. Take

a look at a typical job posting for a cashier job vacancy in Manila.

 To become a cashier, one has to have height and age requirements, and

as a hygiene-conscious country, such requirement is also disclosed up front.

Instead of relying on experience and skills, many Filipino employers rely on looks,

age and other unnecessary requirements (at least for a cashier job). Customers

need to pay you even if you don’t look very pretty; is the cashier chair too high that

a certain height must be reached? Maybe these companies can’t pay that much,

so they only take fresh graduates who may accept lower than minimum salary rate.

 Overpopulation

As of 2005, the Philippines is home to 85 million Filipinos. Considering the

annual population growth rate of 2.3%, the country’s population might reach and

even grow above 95 million in as short as 5 years (Perez 2005). After another 20

years or so, this number might even reach 150 million.

The pace at which jobs are created simply cannot cope up with steady

supply of graduates whom many will find themselves unemployed. A country with

large population doesn’t automatically have unemployment problems.

Opportunities can be built out of such situation. More babies born mean more jobs

for construction workers who build hospitals and schools. More jobs for nurses and

teachers who will take care and educate these children. More foreign businesses

will be setup because with a large pool of cheap labor, it becomes cost efficient to

operate in the country.

Such desperation to get a job can sometimes make applicants more prone

to scams and fall prey to illegal recruiters, SMS and Internet scams, further
degrading their lives. The government’s unemployment problem should not be

remedied only by further exploration of job opportunities abroad (and bragging

rights to the Super Maid program). Such solution may be deemed short-term for

temporary migrant workers. Generating more jobs domestically should also be

intensified.

Effects of High Unemployment Rate in the Philippines

According to Salvosa, F. (2015). Despite rapid economic growth in the

Philippines in recent years, unemployment remains a persistent problem for the

sprawling Southeast Asian nation of more than 100 million people. Under

President Benigno Aquino, in office since 2010, unemployment has fallen. The

latest figures show the rate at 6.4 percent in the second quarter of this year, down

from 7 percent a year earlier. But progress has been uneven and the Philippines

still has one of the highest rates of unemployment in the Asean region. One reason

is that job creation has struggled to keep pace with an ever-expanding population.

In three of the past five years, the number of people entering the job market has

been greater than the number of jobs created.

According to Santos, T. (2013). Despite the Philippines economic growth

being Southeast Asias fastest at 6.8 percent in 2012, the country recorded a high

7.5-percent unemployment rate and 19.3 percent underemployment rate in April,

data from the National Statistics Office (NSO) showed. The jobless rate was up

from 6.9 percent in April 2012. A total of 3.09 million Filipinos were unemployed in

April 2013, up from 2.8 million the previous year, NSO figures showed.
 Apparently, job creation cannot keep up with the estimated one million

Filipinos entering the job market every year. By educational attainment, 33.7

percent of the unemployed were high school graduates, 13.1 percent were

undergraduates, while 16.9 percent were college graduates.

Furthermore, as stated by Stephen D. Simpson (2017), while economists

and academics make convincing arguments that there is a certain natural level of

unemployment that cannot be erased, elevated unemployment imposes significant

costs on the individual, society, and the country. The cost on individual is that

prolonged unemployment can lead to an erosion of skills, basically robbing the

economy of otherwise useful talents; it can change how worker plan their futures

and to extent of workers being less willing to invest in the long years of training

some job require. Similarly, the absence of income due to the unemployment may

force families to deny educational opportunities for their children and deprive the

economy of such future abilities. The cost on the society is that when

unemployment becomes a pervasive problem, there are often increased need for

protectionism and severe restrictions on immigration; however, protectionism can

reduce trade and harm the economic well-being of all trading partners. While the

cost to country, unemployment leads to higher payments from state and federal

governments for unemployment benefits, food assistance, and Medicaid. At the

same time, governments are no longer collecting the same level of income tax as

before – forcing the government to borrow money or cut back on other spending.

The following are some of the reasons that were considered as impacts or

effects of the high percentage of unemployment rate:

 Loss of Income

Unemployment usually leads to a loss of income. This is pretty obvious

since if one does not work, he would naturally not be able to get any income. On

the individual level, this is not so serious, but on a larger scale, this can be very

problematic. People would be less willing and able to purchase goods and services

and they would tend to purchase what they originally consider inferior goods and

hence may experience the negative effects of loss in income such as debt, and

collectively bigger problems such as increased poverty rates and lower standards

of living due to lower purchasing power

 Negative Multiplier Effects

Unemployment occurs when certain factories or companies close down,

and this is especially serious when there is a financial crisis where recession and

unemployment is rampant. When a company closes down, many jobs are lost.

Since what one spends is what another earns and one is unemployed, he has

lower purchasing power and would also prefer to save more as one is likely to be

uncertain of the future. When a large number of people are unemployed,

collectively, their expenditure would be much lower. This would inevitably also lead

to a decrease in demand. On the supplier side, if there’s lower demand and lower

income, they too will lower production, and a decrease in demand and decrease

in expenditure on materials by the suppliers would affect the next level of suppliers

in the same way. This may result negative effects such as a drop in GDP.

 Loss of National Output

 Unemployment causes the scarce resource labor to be underemployed

since part of the workforce is not being used. Hence production is not at its

maximum and thus underemployment of resources would lead to a loss in potential

national output. If the situation does not improve in the long run, aggregate supply

would drop and hence results in a continuous loss of potential national output and

hinders the potential of the country’s growth.

 Fiscal Costs

One way government gets revenue is through tax revenue. This simply

involves taxing the income of people, based on their income. When there is

unemployment, the government would collect less tax revenue as a result since

the incomes of people are lower. This loss would increase as unemployment

increases. Unemployment can result in debt and poverty, and the government has

to take care of these people, hence welfare spending would also increase at the

same time. In cases where unemployment is very high, there would be a budget

deficit, due to a combination of the two, loss of tax revenue and increased welfare

spending. This would result in the government having a limited budget to spend on

the many areas as well as decreased spending on public and merit goods. It might

also burden the employed since the government might increase tax rates to boost

tax revenue.

 Social Costs

An increase in unemployment leads to social deprivation. Social issues

such as increased crime rates and lower life expectancy are all related to
unemployment. For instance, people who have lower income and are in debt might

resort to crime to earn themselves a living, and high employment would lead to

more of such people, leading to increased crime rates. Furthermore, some places

with constantly high unemployment rates might observe high inequality in income,

and this is even more prominent in countries with high growth but high

unemployment.

Possible Solutions to the High Unemployment Rate in the Philippines

Based on econslip2014.com, (2018) there are the things that our country

should to solve or lessen the unemployment rate in our country. The solutions are

the following:

 Reducing Occupational Immobility

Labor resources are usually occupationally immobile because it takes time

for people to gain the sufficient skills that are necessary for working in a certain

industry. Hence, when there is oversupply of labor in a certain industry or when

there is a recession, people who become unemployed cannot find work

immediately or easily since they cannot be employed in the industry that requires

their skills and also cannot work in other industries since they may not have

sufficient skills. Hence, the government can provide retraining programs for the

unemployed, so that they can improve their skills or gain new skills necessary to

ensure their employment.

Reducing occupational immobility is one possible solution that can be

applied to the Philippines. There is an oversupply of workers and a good amount

of graduates every year who fall into unemployment. By enlisting them in retraining

courses, they can gain new skills that are necessary to garner them a place in the

workforce.

 Employment Subsidies

Employment subsidies can be provided by the government for firms who

hire workers that are unemployed. With a subsidy, costs of production for firms go

down since the price of each unit of labor resource decreases. Hence, employers

will be more willing and able to hire more workers and increase the number of

workers that they are willing to hire. This increases the size of the workforce and

the number of job vacancies, hence helping to reduce unemployment. However, it

is difficult for governments to determine how much subsidy to provide and it is

difficult to ensure that firms are willing to retain the increased size of their workforce

when there are changes in the economy (eg. Recession)

 Sustained Economic Growth

Having sustained economic growth is another way for the government to

address the problem of unemployment. When there is economic growth,

employers will be more willing and able to employ more workers. This helps to

address the issue of unemployment. However, this is a long term strategy that

takes a lot of time to see results.

Subsidizing employers that employ unemployed workers can help address

the problem of unemployment in the Philippines. However, this method can place
a strain on the government budget, depending on how much subsidies the

government provides.

According to Pooja Mehta, (2018), there are the things that can do to avoid

increasing the percentage of unemployment rate in any country. The suggestions

are the following:

 Change in Industrial Technique

Production technique should suit the needs and means of the country. It is

essential that labor intensive technology should be encouraged in place of capital

intensive technology.

 Policy Regarding Seasonal Unemployment:

Seasonal unemployment is found in agriculture sector and agro based

industries. To remove it, agriculture should have multiple cropping, plantations,

horticulture, dairying and animal husbandry should be encouraged and cottage

industries should be encouraged.

 Change in Education System

Educational pattern should be completely changed. Students who have

liking for higher studies should be admitted in colleges and universities. Emphasis

should be given on vocational education. Qualified engineers should start their own

small units.

 Expansion of Employment Exchanges

 More employment exchanges should be opened. Information regarding

employment opportunities should be given to people.

 More Assistance to Self-Employed People

Most people are self-employed. They are engaged in agriculture, trade,

cottage and small scale industries etc. These persons should be helped financially,

providing raw materials and technical training.

 Full and More Productive Employment

The main objective of county’s employment policy should be to increase

employment opportunities and productivity of labor. Govt. should adopt a policy

that provides employment to all people.

 Increase in Production

To increase employment, it is essential to increase production in agriculture

and industrial sectors. Development of small and cottage industries should be

encouraged.

 More Importance to Employment Programs

In five year plans more importance should be given to employment. The

programs like irrigation, roads, flood control, power, agriculture, rural electrification

can provide better employment to people.

 High Rate of Capital Formation

 Rate of capital formation in the country should be accelerated. Capital

formation should be particularly encouraged in such activities which generate

greater employment opportunities. Capital output ratio should be kept low.

 Industries in Co-Operative Sector

Industries in co-operative sector should be encouraged. Kerala Govt.’ set

up a textile mill covering 600 unemployed persons on co-operative basis. This is a

novel approach to fight against unemployment. Different State Govt. should take

necessary steps in this direction.

 Decentralization of industrial Activity

Decentralization of Industrial activity is necessary to reduce unemployment.

If industrial activities are centralized at one place, there will be less employment

opportunities in the under developed areas. So Govt. should adopt such policies

which encourage decentralization of industrial activity.

 Population Control

The growth of population should be checked in order to solve

unemployment, problem. Family planning program should be implemented widely

and effectively.

IV. Methods and Procedures

Employing qualitative research methods to data gathering and analysis has

significantly increased in popularity over the past two decades (Strauss & Corbin,

2006). “Qualitative researchers stress the socially constructed nature of reality. They
sought answers to questions that stress how social experience is created and given

meaning” (Denzin & Lincoln, 1998). In contrast to quantitative inquiry where

representations of the world are symbolized numerically, qualitative inquiry offers

representations of the world which are primarily linguistic (Heppner, Kivlighan, &

Wampold, 1999). This type of investigation allows for the subtleties of human

experience to float to the surface. Attention to subtle and, at times, nebulous,

experience requires the researcher to “sustain a fair amount of ambiguity” through

flexibility and openness towards the data (Stauss & Corbin, 2006).

The purpose of this study was to explore and describe the unemployment

problem in the Philippines. Qualitative inquiry and analysis fit this purpose with

stronger sensitivity than a quantitative methodology could offer. Also, there are little

researches existed about the topic; therefore, qualitative methods are suited for this

study. Since this study is exploratory in nature, the process of allowing the data to

speak for itself further supports a qualitative method of inquiry. Given that qualitative

methodology uses context, individual experience, and subjective interpretation,

generalizability is not possible, nor is it a goal (Heppner, Kivlighan, & Wampold, 2009).

The qualitative inquiry, as applied in this study, offers a high level of internal validity.

Applicability of the study to the reader’s personal experience, however, is a goal. Such

applicability would allow readers of the study and future researchers to identify pieces

of the data that may create an interest or spark the development of questions within

the contexts of their own lives or future research. First, the research team will gather

data regarding the unemployment in the Philippines. The data will revolve around
unemployment rate with regards to location, educational attainment, age, gender, and

other category that is helpful with the analysis of the problem.

V. Findings and Results

Main Reason of Unemployment Rate in the Philippines

This paper found out that the main reason of having high unemployment rate of

the Philippines is the unavailability of jobs. This finding is supported by the study

conducted by Central Intelligence Agency on 2013. It asserts that the most probable

cause of unemployment in the Philippines is the lack of available jobs. Santos (2013)

also said that job creation has struggled to cope with the expanding population. In the

past three years, the number of job created is lesser than the number of people

entering the job.

Major Effects of Unemployment Rate in the Philippines

As for the findings, this paper found out that having a problem with regards to

unemployment can lead to loss in national output. This result is supported by the study

of Stephen D. Simpson conducted last 2017. He said that when a lot of people is

unemployed their expenditure would be much lower and this would lead to decrease

in demand. This may also result into negative effects like a drop in Gross Domestic

Product. He said that loss of income increased the poverty rate.

Another effect is the increase in Social Cost. Simpson (2017) discussed that

unemployment can result into poverty, and the government has to take care of these

people and it resulted to increase in welfare spending.

 This paper also found out that high unemployment rate might also burden to

the employed person. Simpson (2017) said that since the government is no longer

collecting the same amount of income tax like before it might result into increase in

tax rates to boost tax revenue.

VI. Discussions and Conclusions

Unemployment remains a persistent problem all over the countries. Based

upon the gathered data, we conclude that the main reason of having a high

unemployment rate is the unavailability of jobs and the major effects of the

unemployment in our country is Loss in Natural Output, Increase in Social Cost, and

it may also burden the employed since the government might increase tax rates to

boost revenue. We also conclude some possible solutions to abate high

unemployment rate, these includes retraining program for the unemployed,

employment subsidies, more assistance to self-employed people, creating more

productive employment and population control.

VII. Recommendations

In the light of the significant findings of the study, the following

recommendations are offered:

This paper recommends to do a research about how to create more productive

employment, how to control our population and create programs that will help the

people to improve their skills or acquire new skills necessary to ensure their

employment.
 Researchers also recommend to the government that they must provide more

jobs in the Philippines, an example is through PPP (Public Private Partnership) where

the government and private firms are merged to produce more projects that will create

more jobs to help reduce the unemployment rate. The government should also end

the contractualization.

Also, researchers strongly recommend to do a similar research to improve the

generalizability of the results and findings.

This would give a lot of information and would help especially to those people

that can help or can do something to decrease our unemployment rate.

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