TENORIO, EDMARK Y.

CPE801A

Unemployment status in the Philippines

Ending "Endo" and Unemployment problems

THE ECOP (Employers Confederation of the Philippines) and PMAP (People Management
Association of the Philippines) disclosed that they are committed on the thrust of President
Duterte to stop contractualization of employment, especially in the private sector. Some
employers warned that there might be a sharp increase in the number of unemployed people,
which can create greater problems. As I closely look at this statement of some employers, I have
to agree to some extent, especially if we look deeper at the different types of unemployment.
Unemployed as defined in economics is any person in the labor force who are without work and
actively seeking for work. Unemployment rate is the ratio of the unemployed and the total labor
force. Just considering these definitions, it is possible that if there is no more contractualization,
employees become regular or have permanent positions at work. Hence, there are lesser job
vacancies, precluding the other unemployed people from being considered for jobs that are
supposed to be vacated by those whose contracts will end, but instead became regular
employees. practice of contractualization is usually done by businesses in order to minimize the
costs of labor especially when the other benefits (that are not compulsory based on the law) are
taken into consideration. If one is contractual, the benefits given to him/her are usually at a
minimum.When contracts end and people get unemployed, it may be as considered frictional
unemployment.When it takes a longer time for someone to be employed, the challenge perhaps is
the lack of access to information by the unemployed. This may be solved by the government by
setting up infrastructure for information to be made available to these unemployed. Another
effect when there is no contractualization anymore is that employers will have to employ lesser
number of people doing the same workload, which would result again to structural
unemployment. Technically, when people are unemployed because of changes in the business
environment, it is classified as structural unemployment. It occurs when there is a fall in the
demand for labor. In this case, since all employees are permanent, there are no available
vacancies, thus there is obviously no need or demand for more employees. Another case that can
result to lower demand for labor is when businesses fold up, either because there is no profit
caused by lower revenues or higher costs. Having a high cost for labor can result to this. This
type of unemployment is said to be the worst type of unemployment because it may be described
to be something that is more permanent, and the most difficult to solve, even by the government.