TAIPEI - TAIWAN plans to launch a billion-US-dollar initiative next month to ease the island's unemployment rate, which hit a five-year high in December, a government spokesman said on Sunday.

The programme, expected to cost several hundred billion Taiwan dollars, aims at creating about 150,000 new jobs in a bid to keep the unemployment rate under 4.5 per cent, the spokesman said.

It would also include extending the period that a person can claim unemployment benefits from six months to nine months, he said.

'We are treating the unemployment issue like disaster rescue work and have formed a cross-agency task force to tackle the problems,' he said.

Taiwan's jobless rate in December hit a record 5.03 per cent - the highest since the 5.05 per cent recorded in September 2003, and is expected to rise further in the months ahead due to the global economic downturn.

For full-year 2008, the island's unemployment rate stood at 4.14 per cent - the highest since 4.44 per cent in 2004.

Taiwan's economy has shown signs of recession in recent months, with exports plunging a record 41.9 per cent year-on-year to US$13.64 billion in December on weakening global demand.

The government last week handed out shopping vouchers worth about US$100 to each of the island's nearly 23 million residents as part of a US$2.5 billion scheme aimed at boosting the flagging economy.

The coupons can be used on goods ranging from food and clothing to electronic appliances.

Taiwan's central bank has cut interest rates six times in the past three months in a bid to stimulate the economy.