Manila, September 18, 2003  (STAR) By Marichu Villanueva  - President Arroyo expressed confidence yesterday a sudden rise in unemployment will be reversed later this year but warned that political squabbling could delay any improvement.

Mrs. Arroyo said the country must first shake off "the syndrome of destabilization and excessive politicking to get investments on track."

"We are also determined to strike up more investments in the industrial and services sectors as economic activities pick up towards year-end," she said.

Mrs. Arroyo also blamed the 12.7 percent rise in unemployment rate on the El Niño phenomenon which adversely hit the agricultural sector and typhoons that hit the country for the first semester of this year.

Mrs. Arroyo said the government alone cannot address the growing ranks of unemployed Filipinos without the cooperation and unity of the country’s leaders to enhance investors’ confidence in the country’s economic environment.

"The incessant atmosphere of controversy and putting-each-other-down must give way to focus and a sense of national purpose to rev up the economy and drive down crime and terrorism," Mrs. Arroyo said.

"More jobs are a result of sound economic fundamentals as much as political security and confidence," she said.

National Economic and Development Authority (NEDA) director-general Romulo Neri reported the unemployment rate rose to 12.7 percent compared to the 11.2 percent recorded in July of last year.

Neri reported out that there was a total of 4.3 million unemployed this year from the 3.81 million jobless Filipinos last year.

NEDA officials described the figure of unemployment rate for the country was "a record high" for this period.

Neri said the jobless rate spike was "weather-related, rather than a reflection of labor market fundamentals."

This was compensated slightly by increases in employment in industry and services, Neri pointed out.

"Industry generated 259,000 jobs or a 5.5 percent increase, while services generated 254,000 jobs or a 1.8 percent growth," he added.

The latest survey of the National Statistics Office (NSO) also showed a figure of 4.35 million jobless Filipinos or about 540,000 more than last year’s recorded unemployed.

Officials said many of these new jobs in industry and services were more long-term and would not be bound by the effects of weather or planting seasons as in the agricultural sector.

But the business community projected a further growth in unemployment rate unless the government comes out with more flexible labor policies.

Employers Confederation of the Philippines (ECOP) president Donald Dee said it would be difficult for the country to recover from the unemployment slump if the government fails to implement "business friendly" measures at the soonest possible time.

Even as the business sector tries to promote employment, Dee said the government is apparently bent on enforcing new policies that would make it difficult for employers to hire additional work force.

Dee pointed out that a new proposed Labor Code, now pending before Congress, requires employers to grant higher separation pay which employers could no longer afford.

Dee lamented that the proposed Labor Code now criminalizes labor violations which, in effect, scares away foreign and local investors.

Presently, many foreign investors are already shying away from the Philippines because of reports that Filipino workers are difficult to handle, Dee said.

"The government should provide more flexible policies for both employers and the workers," Dee said.

He noted that unemployment would continue to rise if the country will post below six percent economic growth in the third quarter.

Dee claimed over a million join the workforce every year but the government is not creating enough jobs because of "faulty policies." — With Mayen Jaymalin

Reported by: Sol Jose Vanzi

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