Financial Bubble Spreads To The Philipines, Where Markets Are Soaring Despite Terrible Economy

MANILA – The buoyant Philippines’ stock market, which has almost doubled in the past nine months, might suggest a similarly lively economy, yet government stimulus spending is failing to make a dent in the jobless rate, and economic growth is barely showing.

The Philippine Stock Exchange PSEi Index has surged from below 1,800 in mid-March to over 3,000. Yet 2.9 million Filipinos of working age were unemployed as of July, with the unemployment rate rising to 7.6% that month from 7.4% a year earlier, according to the National Statistics Office. Workforce participation  was at 64.6% against 64.3% for the same period last year.

The economy is expected barely to grow this year, possibly between 0.8% and 1.8%, before recovering to between 2.6%-3% in 2010.

“What is recovering is the stock market, mainly the financial sector,” said Rene Ofreneo, a labour and industrial relations expert and executive director of the multi-sectoral Fair Trade Alliance. “Right now, only the call centres are hiring, but even that is not at the rate that was originally projected.”

Read the whole story at Asia Times Online >>

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