High Unemployment Rate in the Philippines: 8 Top Causes

The Philippines has long been a labor exporting market. About 2,500 Filipinos leave the country on a daily basis to seek for greener pastures abroad and better provide for the needs of the family, notwithstanding the social impact of this Filipino diaspora.

As of January 2019, the unemployment rate in the country is at 5.2 percent. In comparison with our Asia-Pacific neighbors, Malaysia has 3.4 percent (March 2019), 5.34 percent in Indonesia (August 2018), 1 percent in Thailand (April 2019), and 2.1 percent in Singapore (September 2018). In South Korea, it was 4.4 percent (January 2019), Taiwan, 3.73 percent (April 2019), China, 3.83 percent (June 2018) and Vietnam, 3.10 percent (January 2019).

Most of the unemployed in the Philippines are fresh graduates with about 400,000 added to the labor force each year. But a significant ratio of them also are workers who were retrenched from their jobs or whose employment contracts were not renewed. So let’s identify the reasons why unemployment in the Philippines is high.

Job – skill mismatch among Filipino graduates

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 Filipino nurses were in demand abroad in the earlier part of the new millennium, more schools have mushroomed to accommodate growing demand for nursing education. This effectively left 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 soon as demand for such skills began to dry up.

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.

Lack of quality graduates

Just because universities in the Philippines produce thousands of graduates each year means they are ready to take on available jobs. While it’s understandable that they have minimal experience, many of such graduates don’t qualify on basic requirements posted job vacancies. According to the Professional Regulations Commission, licensure exam results of several professions have less than 50% passing mark as of 2016.

  • Accountancy – 38%
  • Criminology – 29%
  • LET Elementary – 29%
  • LET Secondary – 34%
  • Radiologic Technology – 42%

Although experience is the best teacher, and it’s more about adapting and learning while performing the job, many applicants don’t immediately get the chance to prove themselves beyond their board exam track record (and their school’s reputation). As a result, they end up taking up unrelated jobs or remain unemployed.

Outdated school curriculum

Emerging technologies have created new set of careers — from artificial intelligence to nanotechnology. However, the Philippine education system is slow to adopt and continue to include subjects that are close to being obsolete, depriving students to be at par with the industry trends.

Although there are universities that manage to innovate, there is a big challenge among many others to do so. Lack of qualified teachers, facilities and academic resources remain as the biggest roadblock for them to advance forward.

No wonder that some companies have ditched the college degree as a prerequisite to employment.

Lack of skills and experience

Due to 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. Some job postings require substantial amount of experience, and fresh graduates, therefore, are left out of contention.

With little or no entrepreneurial skills, many job hunters are unable or unwilling to establish their own business as an alternative to being employed.

Lack of understanding about job application

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.

Poverty cycle

In 2015, poverty rate in the Philippines stood at 21%. Poverty can be a direct or indirect contributor to unemployment. Families under this category cannot send their children to school, and ask them to contribute to the family by entering the job market early. Such jobs — construction assistants, household helpers, and other lowly-paid employment — can be detrimental to their future career development. Without educational background, their prospects for decent jobs are low.

The government provides programs for education among the lower-income members of the community. However, these are limited and many are left out to fend for themselves. The cycle continues soon as they start their own family, as their children are at risk of following their footsteps of poverty.

Rapid population growth

As of 2017 the Philippines is home to 104.9 million Filipinos, a number that is forecast to increase to 145 million in 2045. Growth is expected even with the projected slowing down in average annual population growth rate, from 1.73 percent during 2010-2015 to 0.65 percent during 2040-2045.

The pace at which jobs are created simply cannot cope up with steady supply of graduates many of whom will find themselves unemployed.

Conclusion

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.

Unfortunately, it doesn’t exactly work that way in the Philippines.

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. Such solution may be deemed short-term for temporary migrant workers. Generating more jobs domestically should also be intensified.

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