ILO: Global unemployment expected to rise in 2017; Philippines to buck trend

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Metro Manila (CNN Philippines) — The inability to create enough jobs to meet the growth of the labor force will push the rise of unemployed persons worldwide to 201 million in 2017, the International Labor Organization (ILO) says.

In its World Employment and Social Outlook - Trends 2017 report released last Thursday, the United Nations agency says the unemployment rate is set to rise to 5.8 percent compared to a year ago or 3.4 million more to 201 million in 2017, as labor force growth "outstrips job creation."

Asia/Southeast Asia bucks the trend

However, 60 percent of the global workforce is accounted for by Asia and the Pacific, a region where net employment is expected to grow by over 20 million this year, the same figure as in 2016.

The ILO report particularly cited the Philippines and Indonesia, two countries in Southeast Asia where total employment is forecast to grow by 4.5 million in 2017.

"Total employment expanded by around 5 million in South-Eastern Asia and the Pacific, equivalent to growth of 1.6 per cent, and is forecast to grow by another 4.5 million in 2017, with Indonesia and the Philippines accounting for the majority of employment growth in this subregion," the report said.

"The shape of employment growth reflects the structural transformation taking place in the region; that is, the transfer of capital and workers from low to higher value added sectors," it added.

In its interactive map, the ILO said that the unemployment rate, or the percentage of Filipino adults looking for, but unable to find work stands at between four to six percent, the same number as Indonesia.

This figure is in line with country's statistics that show the unemployment rate at 5.5 percent, according to the 2016 Annual Labor and Employment Status report released by the Philippine Statistics Authority in December.

The ILO report predicts that the unemployment rate in the country will remain constant at 5.9 percent until 2018. This number has remained unchanged since 2015.

Some 20-35 percent of workers in the Philippines fall into the category of "working poverty," defined as those earning less than $3.10 (P154.00) a day.

Fiscal stimulus and public investment needed to create more jobs

ILO Director-General Guy Rider said the challenge lies in creating quality jobs for the millions who join the work force every year.

"Economic growth continues to disappoint and underperform - both in terms of levels and the degree of inclusion. This paints a worrisome picture for the global economy and its ability to generate enough jobs. Let alone quality jobs," Rider says.

This same phenomenon will push unemployment numbers by 2.7 million more in 2018, the ILO said, affecting people in the regions of Latin America, Sub-Saharan Africa, and the Caribbean.

The report noted certain areas face more challenges than others.

The number of working-age people willing to work abroad has increased in almost every region—most especially in Latin America, the Caribbean, and the Arab states.

It has gone down, however, in South Asia, South East Asia, and the Pacific.

To address the shortage in job creation, the ILO said that a "coordinated effort to provide fiscal stimulus and an increase in public investment that takes into account each country's fiscal space, would provide an immediate jump-start to the global economy and reduce global unemployment in 2018 by close to two million compared to our baseline forecasts."

"Boosting economic growth in an equitable and inclusive manner requires a multi-faceted policy approach that addresses the underlying causes of secular stagnation, such as income inequality, while taking into account country specificities," Steven Tobin, ILO senior economist and lead author of the report said.

Local efforts to increase stable employment

To meet the government's economic goals including the creation of more jobs, the Duterte administration has released an 8-point agenda which includes the building of infrastructure and attracting foreign investments.

Read: LIST: Duterte's 8-point economic agenda

The Philippines recently received a pledge of one trillion yen (US$8.7 billion) for infrastructure projects following the visit of Japanese Prime Minister Shinzo Abe last January 12 and 13.

Read: Japan pledges P434B in investments, biz deals in the works

This funding will go into infrastructure, tapping Japan's world-renowned technology to develop transportation and power projects, according to Japanese Press Secretary Yasuhisa Kawamura.

The Japanese government is also supporting irrigation, road construction, power generation and education in Davao City.

The Duterte administration is also making efforts to get rid of contractualization—a prevalent practice where companies terminate a worker's contract before the sixth month of employment

Read: Duterte tells big businesses to stop contractualization