Over the past years, the Philippine economy has grown to a level of plus 7%, this growth is mostly due to the establishment of a large number of service companies as well as a substantial increase in the general consumption. Despite being a positive aspect, this growth does not necessarily translate to the creation of jobs. In fact, the unemployment rate has actually increased as part of this 7% growth – driven by consumption. A positive, sustainable and reliable growth must push the unemployment rate to numbers around 3-4% and economic reform and strategy urges to be done by the Filipino government.
What needs to be done to change the situation?
Employment generation must be achieved by a growth in terms of production. An improvement in the industrial sector, agriculture and, most importantly, reform of the education system must occur in order to provide trained and efficient staff to achieve those new functions.
Growth in agriculture must occur as there is and there will be more and more people to feed locally as well as for export purposes.
The industry will become more and more automotive as the traditional industry will become obsolete due to investment in term of machinery, process. Machines will replace a large part of the labor pool; however there will be a need for well trained staff, thus requiring a clear change in terms of education and orientation of the people.
Another factor that must help the Philippines achieve its future economic growth is obviously the development of its own infrastructure. In the Philippine archipelago, land, sea and air transport must become optimized in order to attract more and more investors to invest all over the country. This means that actual investment must focus on the development of new roads, railway and airports to optimize the cost and time of transportation.
Mining must play an important role here as the world demand in terms of natural resources will keep on increasing and the export demand as well. Tourism is also an industry where the Philippines must concentrate on. As we have seen in many countries, this will help the archipelago to grow, will create jobs and will strengthen the links with other countries. A tourism strategy that will be less focused on the domestic market should be implemented. Malaysia and Thailand are good examples to follow.
Having been in the Philippines since 2007, do not hesitate to contact Triple i if you would like to learn more about the Philippines and understand the economic and political context of one of the fastest growing economies in Asia.