THE RANKS of jobless Filipinos grew in October, but job quality saw the biggest improvement in more than a decade, according to latest labor data which the government released on Tuesday.
The preliminary results of the Labor Force Survey (LFS) conducted by the Philippine Statistics Authority (PSA) put the unemployment rate at five percent in October, compared to the year-ago 4.7%. This is equivalent to 2.19 million Filipinos, up from 2.04 million a year earlier.
At the same time, there may be more better-quality jobs available in the labor market as the underemployment rate — the proportion of those already working but still looking for more work or longer working hours — improved to 15.9% from 18% last year, the lowest in more than 10 years. This represents around 893,000 less underemployed workers during the period.
The employment rate was 95% in the same month — consisting of about 41.6 million individuals — slightly less than October 2016’s 95.3%.
The labor force consisted of approximately 43.72 million individuals out of an estimated 70.4 million Filipinos aged at least 15 years old, taking the labor force participation rate to 62.1%, lower than the past year’s 63.6%.
The National Economic and Development Authority (NEDA) particularly noted in a statement the increase in employment of wage and salaried workers “by about 624,000” and the decrease in “vulnerable employment” — consisting of the self-employed and unpaid family workers — to 33.9% from 36.3% a year ago.
The self-employed made up 27.9% of the total employed, an improvement from 27.6% in October 2016, while unpaid family workers accounted for six percent, fewer than 8.6% last year.
Wage and salaried workers accounted for 62.3%, up from 60.6% the previous year.
“Regular conduct of job fairs and provision of livelihood assistance have contributed to the improvement of underemployment especially in areas outside of the National Capital Region (NCR). This is a good indicator that our efforts in the lagging regions are starting to take effect,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the NEDA statement as saying.
Underemployment in areas outside of NCR was 17%, lower than the past year’s 19.6%.
By sector, most of the new jobs were in industry and services. Hiring in services improved to 57% from 54.6%, while employment in industry rose to 18.1% from 17.1%.
Offsetting these gains were jobs lost in agriculture, which saw employment rate declining to 25% from 28.3% — representing around 1.4 million layoffs.
On the other hand, much of the declining underemployment was seen in agriculture, with a 32.6% rate in October that was better than last year’s 39.6%. Industry and services, meanwhile, saw underemployment rates increase to 19.5% (from 17.1%) and 47.9% (from 43.3%), respectively.
“[T]he annual drop in the underemployment rate during October was mainly evident in the agriculture sector,” said Security Bank Corp. economist Angelo B. Taningco, citing “favorable weather conditions.”
Mitzie Irene P. Conchada, associate dean of the De La Salle University (DLSU) School of Economics, ascribes the higher unemployment rate to a 2013 law that increased excise tax rates for alcohol and tobacco products.
“The sector that registered the highest unemployment rate is the agricultural sector, particularly in the Ilocos region with 8.9%, which is higher than the national average of 5.6%,” Ms. Conchada said, referring to the country’s main tobacco growing area. “This was attributed to lower demand for tobacco products due to the higher excise tax on tobacco products implemented in 2013.”
The provision under the tax reform being finalized in Congress to raise the tobacco excise tax even further, she added, “will hurt many tobacco farmers and workers as big cigarette companies express the probability of closing operations in the country.”
Ms. Conchada said added that underemployment rate’s overall “decline could be attributed to more casual jobs being available this year.”
Rene E. Ofreneo, professor at the University of the Philippines School of Labor and Industrial Relations, said that the increase in unemployment rate was “negligible” while the decline in underemployment was “significant.”
“The latter can be interpreted to mean that better-paying jobs are increasing, which can be attributed to more available jobs and, in a limited way, gains in the anti-endo [end-of-contract] campaign,” he said.
Last March, Labor Secretary Silvestre H. Bello III signed Department Order (DO) 174 which spelled out the rights of employers and employees in contractual hiring arrangements. The order also banned “endo,” short for “end-of-contract” which refers to the practice of hiring workers in successive five-month periods, allowing firms to skip benefits given to permanent workers. DO 174 took effect on April 2.
The order, however, did not completely eliminate job contracting — an arrangement wherein an employer farms out jobs to a third-party contractor who then hires workers of its own.
Looking forward, Security Bank’s Mr. Taningco bared a positive outlook for the job market, saying: “The October figure leads the average unemployment rate for 2017 to settle at 5.7%, which matches my forecast for the year.”
“For 2018, I forecast a slightly lower unemployment rate of 5.5%; this hinges on faster economic growth supported by stronger government spending, business investment, and exports.”
For DLSU’s Ms. Conchada, the proposed increase in excise taxes on tobacco and sugar-sweetened drinks might adversely affect the agricultural sector in the long run. “I am concerned that the agricultural sector and jobs associated with it will continue to be affected with this increase in excise tax.”
“The government’s ‘Build, Build, Build’ program possesses job opportunities… hopefully the poor could participate as well. Moreover, local and international investment in the manufacturing and services sector continues to be rosy which could be a potential source of job opportunities.”
UP’s Mr. Ofreneo also said that one should read between the lines when looking at official employment data.
“[O]ne should also look into the situation of those who are not in school and yet not counted in the labor force. These are the idle working-age population who are not looking for work because they feel none are available to them…”
“The point is that the limited statistics that we have do not say much,” he added.
“For the job optimists, they can cite the declining rate of underemployment. For the pessimists, they can argue that more idle workers are not reflected simply because they are lumped with ‘not in the labor force’.” — Arianne Kristel R. Pelagio