The Economic Deterrent That Prevent Improvement of the Economy (Stefani L. Bartolabac)

                    The Economic Deterrent That Prevent Improvement of the Economy

    Economy is the process of production, distribution, and consumption of certain goods and services by individuals in the society. These are three basic stuffs that economic activity involves: natural resources, labor, and capital. These shapes for the evolution of economy are geographical location, culture, values, political organization, law, and education. Certain individuals, organizations, and nations have always faced the enormous challenge of limited goods and services since the dawn of history. They have developed variety of approaches to effectively use the natural resources, labor, and capital for progress.

    One of the problems that trigger Philippine economy is the Job Generation Decline. Job generation is declining steeply from 2011 to 2013 – 1.2 million jobs generated in 2011, down to 408,000 in 2012 and declining further to 317,000 in 2013. Unemployment rate in the Philippines increased to 6.50% in the third quarter of 2015 from 6.40% in the second quarter of 2015. Unemployment rate in the Philippines averaged 8.82% from 1994 until 2015, reaching an all-time high of 13.90% in the first quarter of 2000 and a record low of 6% in 4^th quarter of 2014. Unemployment rate in the Philippines is reported by National Statistics Office.

     Worsening conditions of the poor is one of the issues that Philippine economy is facing today. Data from National Statistics Office (NSO) reveals the worsening conditions of the poor majority of Filipinos in 2013. It shows there is a severe disparity between economic growth boasted by Benigno Aquino administration within 2010-2013 and foreign direct investment, on the one hand, and job generation on the other hand poverty and inequality remains a challenge. In the past four decades, the proportion of households living below the official poverty line has declined slowly and unevenly and poverty reduction has been much slow. Great inequality across income brackets regions, and sectors, as well as unmanaged population growth, are considered some of the key factors constraining poverty reduction efforts. The main causes of poverty in the country include the following:

·         Low to moderate economic growth for the past 40 years;

·         Low growth elasticity of poverty reduction;

·         Weakness in employment generation and the quality of jobs generated;

·         Failure to develop the agriculture sector:

·         High inflation during crisis periods;

·         High levels of population growth

·         Recurrent shocks and exposure to risks such as economic crisis conflicts, natural disasters, and “natural disaster.” (www.adb.org)

The report comprehensively analyzes the causes of poverty and recommends ways to accelerate poverty reduction and achieve more inclusive growth. In the immediate and short term there is a need to enhance government’s poverty reduction strategy and involve key sectors for a collective and coordinated response to the problem. In the medium and long term the government should continue to pursue key economic reforms for sustained and inclusive growth.

    Restoring a strong economy and job market must be the number one priority for the President of the country. What the government can do to the economic growth are:

·         Promote economic growth through innovation

·         Strategic immigration reform

·         Require unemployed workers to volunteer

·         Remove unnecessary and unclear laws

    Government must look for better solution in how to increase our economy. We must not be dependent to other countries and we must stand on our own. As a Filipino student, we can help by simply serving for the better future of our country. Maybe, there will be no unemployed Filipinos and less poverty if our government officials know how to manage our economy. Filipino citizens must choose officials who will serve the country well.

 

Stefani L. Bartolabac BSOT-1B