'Jobless growth' phenomenon haunts Philippines economically

It is a sad fact that despite the rapid economic expansion of the past two years, millions of Filipinos remain unemployed.

This is what economists refer to as "jobless growth", a phenomenon that afflicts many developing countries, debunking the myth that economic growth automatically translates to employment and poverty reduction.

Halfway into his six-year term, Philippine President Benigno Aquino recently challenged his cabinet to come up with an action plan for poverty reduction, mainly through job generation.

Philippines' business process growth fail on talent retention

He presided over a rare full-cabinet meeting after a survey showed that the unemployment rate in 2013 had worsened to 27.5 percent, equivalent to an estimated 12.1 million people.

And yet the economy expanded by 7.2 percent, the second-fastest in Asia after China's.

There are several proposals to address unemployment but, sadly, there are no short-term solutions.

They involve structural reforms that will make it conducive for investors to put money in factories and brick-and-mortar industries.

Only recently, the Asian Development Bank (ADB), in a publication titled Taking the Right Road to Inclusive Growth, reiterated that the Philippines' failure to boost its industrial sector was a key reason its economic growth remained far from being inclusive.

"The Philippine economy's chronic problems of high unemployment, slow poverty reduction and low investment are reflections of the sluggish industrialization," the ADB said.

It points out that it is the industrial sector - which includes manufacturing - that should drive the economy to substantially reduce unemployment and poverty.

Economic growth during the past years had been fuelled by the service sector, mainly the business process outsourcing industry.

According to the ADB, the industrial sector, compared with the service sector, has the better ability to create more job opportunities for the poor and a much higher multiplier effect on the economy.

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