October 10, 2011

Unemployment of the Philippines


Source of data: DOLE/UN Data. Note: The three years forecast from 2011 to 2013 was generated using average simulation technique.

Graph 1. The graph shows the unemployment of the Philippines from 1986 to projected 2013.

From 1986 to projected 2013, the unemployment of the Philippines is upward sloping.

Year
Unemployment
Growth Rate
1992
2,593,750.00
13%
1998
3,043,000.00
13%
2000
3,459,000.00
13%
2006
2,829,000.00
-47%
2011
3,237,437.50
12%

Among the years, 1992, 1998, 2000, 2006 and 2011 posted a significant double digit growth rate.

Based on research, 1992 was the year when Fidel Ramos was elected as president of the Philippines. It was also the year when increasing kidnapping cases were recorded specially in the wealthy family of Chinese.

On the other hand, during year 1998 Fidel Ramos ended the International Monetary Fund’s assistance; he also called for Charter Changed (Cha Cha) which failed to gained supporters. In this year Joseph Estrada was elected as president of the Philippines.

Year 2000 spotted the Philippines as home of the terrorist. The Abu Sayyaf group kidnapped 23 teachers and 30 students in Basilan; after the cross fire between the Philippine army and the group, four hostages were found dead.

Relative to the mentioned past historical events, it can be safely said that the positive growth in the unemployment of the Philippines is associated with investor’s confidence. Year 1992 and 2000 pictured kidnappings and terrorists attacks which could be associated with negative investor’s confidence; which could also be associated with positive double digit growth of unemployment by 13 percent from both years.

On the other hand, international crisis such as financial crisis, credit crisis and the like could also result to double digit growth in unemployment. The 1997 financial crisis is a good example wherein the after effect of the said crisis was felt during 1998 which could be associated with declined in foreign direct investment.

Year
Foreign direct investment, net inflows (BoP, current US$) in Billion
FDI Growth Rate
1996
1.5
3%
1997
1.2
-24%
Source: UN Data
Year 2006 was different; unemployment posted a negative growth of 47 percent, a record braking decline in the unemployment of the Philippines. This happened during the term of President Gloria Arroyo, the aged of growing overseas Filipino workers (OFW) and business process outsourcing (BPO).

Year
Foreign direct investment, net inflows (BoP, current US$) in Billion
FDI Growth Rate
2004
0.7
29%
2005
1.9
63%
2006
2.9
37%
Source: UN Data

It is safe to conclude that foreign investments have positive impact on employment of the Philippines. Thus, any factors might affect the variable should be monitored – peace and order, political instability, and financial and credit crisis.
Year
Unemployment
Growth Rate
2011
3,237,437.50
12%
2012
3,048,218.75
-6%
2013
3,142,828.13
3%
Projected unemployment of the Philippines from 2011 to 2013.
Note: The three years forecast from 2011 to 2013 was generated using average simulation technique.


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