The Philippines economy embraces different difficulties like any country in the world.

From the recent years until the contemporary times, one of the main challenges that is rather
massive in the Philippines is unemployment. In fact, the Philippines has the highest
unemployment rate among members of the Association of Southeast Asian Nations (ASEAN),
according to a report of the International Labor Organization (ILO) published in 2014.
According to Andres Castillo, second Governor of the Bangko Sentral ng Pilipinas
(BSP), unemployment can be defined as involuntary idleness on the part of the laborers who
actively seek for work but cannot find work. And, unemployment rate can be defined as the
number of people looking for a job divided by the labor force. Alterations in unemployment
mostly vary on inflows made up of employed Filipinos who lose their job, of non-employed
people starting to search for jobs, and of people who stop looking for employment (Corpuz,
2012).
The Philippines was ushered into the new millennium with a rapid economic expansion
associated with domestic labor market conditions. Despite these developments in the country,
there are still millions of Filipinos who remain unemployed. As of 2013, there are 7.25 million
underemployed and about 3 million who have no jobs. Indeed, the level of unemployment and
underemployment in the Philippines, which involves no less than a quarter of the working force
rooted in underperforming sectors of the economy, is the primary cause of the income
maldistribution and high poverty rates (The Manila Times, 2014). Without the strong
manufacturing industry, the economy will most likely be unable to make enough decent jobs for
the Filipinos. According to employment figures, jobs in the Philippine manufacturing sector
enhanced by just 8% of the total employment.
The steady rise of inflation has contributed to the decline of the value of the minimum
wage. The Aquino administration increased the minimum wage and announced cash dole-outs.
However, despite these efforts done by the government, the lack of quality decent paying jobs
and higher real wages continue to be a dilemma to the country.
In highly-urbanized areas like in Cebu City, higher unemployment percentage will be
expected since more people from the countryside migrate to cities with greater employment
opportunities (Lacamiento, 2013). Fidel Magno, the head of the Department of Manpower
Development and Placement (DMDP) of the Cebu City Government, cited that high
unemployment rate can be attributed to the mounting labor force that is mostly constituted of
fresh graduates together with the lesser jobs produced by the labor market.
Causes of Unemployment in the Philippines
Overpopulation and Oversupply of Graduates
Philippines has a high population growth rate at an average of 1.7% for the past few
years, consistently higher than the world's population growth rate at an average of 1.2%. One
reason is that job formation has struggled to keep pace with an ever-expanding population.
From the past five years of 2015, the number of people entering the job market has been
greater than the number of jobs created. The high population growth rate which implies to a
steady supply of graduates outstrips the rate of jobs in the Philippines, leaving these graduates
jobless.
The number of graduates has been gradually increasing over the years. Traditionally,
the months of March and April are recognized as graduation months in the Philippines. Every
year, the new graduates from the different schools and university, and some of those who
completed secondary school, try to find employment and aim to become part of the country’s
labor force. However, only few job seekers are able to find jobs immediately. This is one of the
reasons why the unemployment rate is usually the maximum during the April round of the Labor
Force Survey (LFS) of the National Statistics Office (NSO) compared to the other survey
periods.

Economic Recession
Economic recession is one of the main causes of unemployment. During a recession,
firms and organizations experience a decline in revenue. Since profit equals to revenue minus
cost, the firms would want to cut as much cost as possible. One ways to execute this is through
the retrenchment of employees, where employees deemed to be unproductive and incompetent
enough lose their jobs. As this happens, unemployment rates go up.

Inability to take on available jobs

Due to people with lack of related skills and experience, the unemployed or fresh
graduates would not be able to take on the careers that are open in the job market. Unless
these unemployed invest in adequate training, which is time consuming, they will still find it
complicated to gain themselves a place in the high-demand jobs because firms prefer
employees with the necessary skills, abilities, and experience which some might not possess.
On the other hand, the lack of well-organized system of labor exchanges or employment
agencies explains to some extent why many skilled workers become idle. Employers must be
aware that they cannot always hire the right kind of people they want even if there are
unemployed workers who possess the necessary qualifications.

Effects of Unemployment in the Philippines

An effect of unemployment brings about numerous detrimental physical, social and
economic effects.

Loss of Income
Unemployment apparently leads to a loss of income. On a larger scale, this can be
problematic since they would be less able to purchase the goods and services. Instead, they
would rather tend to purchase the 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

When unemployment occurs, there are certain factories or companies close down, and
this is especially crucial where recession is rampant due to financial crisis. When a company
closes down, many jobs are lost. If ever there is a large number of people who are unemployed,
collectively, their expenditure would be much lower.

Fiscal Costs
One way government gets revenue is through collecting tax from the income of the
people. 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 to debt and poverty, and the government has a responsibility to these
people, hence welfare spending would also increase simultaneously. Due to a combination of
the two, loss of tax revenue and increased welfare spending, there would be a budget deficit.
This would lead to a limited budget of the government to spend on the many areas as well as
decreased spending on public and merit goods. The greater the number of unemployed beings
or the longer they stay jobless, the more money the government needs to shell out. This goes to
show that the nation not only has to deal with the lost income but also with the additional cost.
Social Costs
An increase in unemployment leads to social deprivation. Social issues such as
incremental crime rates and lower life expectancy are all related to unemployment. Many
families are also forced to reside to poor and unwholesome surroundings and not capable to
acquire sufficient basic necessities. 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 such as the Philippines.

Sources:
Brooks, R. (2002). Why is Unemployment High in the Philippines? Retrieved from:
http://unpan1.un.org/intradoc/groups/public/documents/APCITY/UNPAN027367.pdf
Cacnio, F. (2012). Inflation Dynamics and Unemployment Rate in the Philippines. Retrieved
from: http://www.bsp.gov.ph/downloads/EcoNews/EN12-02.pdf
Corpuz, R. (2012). An Analysis on the Three Main Problems of the Philippines Related to
Political Economy and its Solution. Retrieved from:
https://www.academia.edu/8737463/An_Analysis_on_the_Three_Main_Problems_of_th
e_Philippines_Related_to_Political_Economy_and_its_Solution
Lacamiento, G. (2013). Unemployment Rate Seen to Increase in Urban Areas. Retrieved from:
http://www.philstar.com/cebu-business/2013/06/14/953831/unemployment-rate-seen-
increase-urban-areas.
Pinoy OFW (2009). Six Reasons Why Philippines Jobless Rate is High. Retrieved from:
http://www.pinoy-ofw.com/news/224-reasons-why-philippine-unemployment-rate-is-
high.html.
Salvosa, F. (2015). Philippines Struggles with Unemployment Despite Economic Groth.
Retrieved form: http://www.cnbc.com/2015/09/01/unemployment-in-philippines-an-issue-
despite-rapid-economic-growth.html
Santos, M. (2014). PH has highest Asean unemployment rate —ILO report. Retrieved from:
http://globalnation.inquirer.net/103286/ph-has-highest-asean-unemployment-rate-ilo-
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Unemployment in the Philippines (n.d.). Retrieved from: http://econsilp2014.weebly.com.
Set up Non-Profit Organizations
Non-profit organizations exist in order to improve the quality life of the people in modern
societies. Research shows that non-profit sectors have substantial impacts on governments in
terms of influencing the economic and social policies since they place their attention on the root
cause of the social problems (Seyhan, 2013). Innovative societies call for leaders who have
appropriate balance of skills, competencies, and capabilities that are able to respond to
ubiquitous challenges in the Philippines, together with the changing and competitive
environment.
In this era of rapid change, unemployment rate has been expanding tremendously.
Nonprofit sectors can play a crucial role in developing social goods. It is significant for the
nonprofit leaders to represent innovative and pioneering management skills in order to operate
effectively and efficiently when faced with external changes in the environment. The non-profit
organization proposes concrete ways necessary to fight unemployment and other vulnerabilities
in the labor market. These ways are addressed to national governments and intergovernmental
organizations. Even though the governments are not the sole actors, still, their impact on the
economic issues and growth are the most concrete and tangible.
1. Boosting job demands in the labor market
One of the most significant remedies in unemployment is the creation of public
employment agencies. The labor market needs to be organized similar to that of the
market for stocks and other commodities. The nonprofit organizations should collaborate
with employment agencies in order to provide an organized market for laborers where
they could get connections with prospective employers. For instance, the Associated
Charities of the Philippines was once an important agency in Manila wherein they aim to
find work for the jobless. The function of this agency is now being performed partly by
the Department of Social Welfare and Development.
2. Adoption of Public Works Program
The nonprofit organizations, with the aid of the government, can trigger a structural
change for the unemployed. Through the construction of public buildings, roads, bridges
and other public improvements, the idle workers who cannot be accommodated in
private firms can be employed in here. The government must take the initiative of
providing relief to the unemployed by undertaking a well regulated public works program.
Infrastructure construction and research and development projects do not only generate
jobs, but they also lead to an increased future productivity of the economy.
3. Improve Education and Training in order to achieve a better qualified workforce
Nowadays, firms demand more skilled workers than the recent years. It is clear that the
correlation between the level of education attained and the employee’s income has
become a forefront issue in employment. Thus, education and professional development
are vital for the workforce applicants to achieve success in their career.
The non-governmental organizations have thorough first-hand knowledge about the
education situation in remote areas. This can serve as a beneficial source of expertise to
the local governments (Grundmanova, 2012). In appreciation to a network of volunteers,
the NGOs can carry out education and awareness programs, and other trainings such as
Technological Vocational trainings, aiming at getting children to school. TechVoc training
can aid job seekers keep up with the technological progress by continuously improving
their skills and knowledge. Simultaneously, sharing results of such programs would
enhance effectiveness and promote best practices to other regions and countries.