Unemployment remained high in the Philippines compared to the other countries in the region. Despite the relatively fast employment growth, it is not sufficient due to the growing population and the increasing labour force participation (labour force participation went up by 0.5% from April 2011 to April 2012). Another factor causing this is the lack of jobs provided, which is mainly because of the lack of investors and businesses. When there is a growing population, there is no doubt that there will be an increase in the demand of goods, but due to the lack of investors and businesses, it will only result in an even lower Gross Domestic Product (GDP). Labour force refers to all individuals who are 15 years old and above, either working or looking for a job. It is somewhat difficult to measure the unemployment rate in the Philippines considering the government cannot fully assess every individual, especially people living in rural places. Citizens working in rural places are mostly farmers so they are considered as seasonally unemployed, which means there is no income when they are in the growing season. There are also quite a few illegal activities and unreported activities going on around in the Philippines, both in urban and rural areas, causing the unemployment rate to be overestimated. GDP ignores underground economy, which means productions with no official records are excluded. Underground economy describes all market activity that goes unreported are either illegal or just wants to evade taxes on otherwise legal activity. This mostly happen in their capital city, Metro Manila, it has the highest population and job opportunities, but still not enough to sustain the demand for jobs. Thus, Manila has the highest unemployment rate, 10.4%, compared to the other parts of the Philippines. According to the article, 51.7% of those without jobs are between the ages of 15 to 27 which means half unemployed Filipinos is due to frictional unemployment. It is either they are fresh graduates looking for their first job or it takes some time for an unemployed person to find a job. This can be supported where the article stated “Almost one-third, or 32.8 percent, of the young unemployed Filipinos are high school graduates, 13.8 percent are college undergraduates, and 21 percent are college graduates”. Another source of Philippine’s unemployment is cyclical unemployment. Cyclical unemployment is associated with the recession phase of the business cycle. For example, during a recession there will be a low GDP; most firms will then reduce their demands for input including labour. GDP per capita of a country is defined as the total monetary value of GDP, divided by the total population. It is often used to measure the standard of living, particularly in comparison to other nations. There had been relatively low GDP in the Philippines which makes it harder to lower the unemployment rate. It is shown in the article that “another factor that compounds the unemployment problem is the low gross domestic product (GDP) growth in the Philippines, which was only 3.7 percent last year, the lowest in the region”. When there is a low GDP, it means there is poor economic growth or activity causing companies not to create new jobs. It is then said that “employment opportunities have failed to keep up with growing number of Filipinos joining the labor force”. It will then lead to an increase in the unemployment rate, which will lead to a lower standard of living. Nevertheless, the employment rate increased in April 2012, this is found in the article, “the estimated 62.8 million Filipinos, aged 15 and above, 40.6 million are in labor force, up slightly from the estimated 39.7 million recorded in April 2011”. This is mostly due to the increase in their GDP found in the table. The main reason of unemployment in the Philippines are social problems. A rise in unemployed people usually causes an increase in crime. This is proven in the crime statistics report, Philippines is 2nd in Southeast Asia after Malaysia whereby Philippines’ crime rate is in the top 50 around the world.
The Philippines’ unemployment rate is correlated to GDP and economic growth. It then can be concluded that Philippines’ GDP is increasing and its economic growth is improving because their unemployment rate dropped. However, it does not mean everything will run smoothly, they still have to maintain and improve their positive economic growth due to the shortage of jobs. Comparing to the other Southeast Asian countries, Philippines’ unemployment rate is very high, probably because it has the highest