The Situationer provides an analysis of the country’s employment scenario in 2002 within the context of recent trends in the labor market. It served as DOLE’s input to the annual Socio-Economic Report on Chapter 2 of the Medium-Term Philippine Plan (MTPDP).

The report took note that the economy produced decent growth rates coupled with modest employment.  In 2002, for instance, GNP and GDP grew by 5.2 and 4.6 percent, respectively; the best performance since the 1997 Asian financial crisis. However, high unemployment remains for two reasons.  One, the growth in the labor force is higher than employment. The economy generated only 906,000 new jobs vis-à-vis the 1.1 million increase in the labor force.  Thus, the unemployment rate remained high at 11.4 percent, which is equivalent to 220,000 more unemployed persons.  Two, the economy simply did not grow enough to crack the unemployment problem.  For unemployment levels to fall to about 8.0 percent at 3.5 percent labor force growth, the economy should grow by at least 7.0 percent for a sustained period of four years.

From these findings, the Situationer points out that the attainment of an ideal growth rate comparable to employment goals would require enormous amount of investment.  Thus, local and foreign investors should be enticed to pour their money to productive activities that will generate jobs.  Government should likewise do its share by pump priming activities.