The financial crisis which engulfed the whole Asian region certainly affected the Philippines
macroeconomy. The moderate level of economic growth which the country had experienced inthe mid-1990s was halted. The slowdown affected industrial production, the state of
government finances and the financial system.
More importantly, the crisis affected the general welfare of the population. Prices of basic
commodities increased, while real wages and employment were severely hit. The level of
unemployment and underemployment increased, while a large number of workers were
retrenched, laid-off or were working under job rotation schemes. The structure of production
and employment shifted to the services sector, reducing labour productivity. Overseas work
provided less opportunities for those unemployed. While the crisis heightened tripartite co-operation in minimizing job losses and workerdislocation, it underlined that various measures would still have to be implemented in order to provide adequate social protection to those who are unemployed. In spite of efforts by the Philippine government to develop a package of programmes for affected workers, theseprogrammes were still inadequate. The design of the projects needed to be improved, while it also required more priority funding.
In the end, without changes in industrial and trade policy to increase labour productivity and
improvements in government’s social policy towards labour, the government will have to
perennially undertake temporary measures to address the employment and social effects of a
crisis. It has been suggested that the crisis provided an opportune time to implement
‘alternative’ development strategies, of which the implementation of the redistribution of assets,and a focus on agrarian reform and rural development are vital components, in order to reducethe burden of future economic crises.
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