LATEST DATA show improvements in the country’s labor market with the number of jobless Filipinos, decreasing and those wanting more work dropping to an all-time low in April, the Philippine Statistics Authority (PSA) reported yesterday.
Preliminary results of the PSA’s April 2019 round of the Labor Force Survey (LFS) put the unemployment rate at 5.1%, down from the 5.5% in the same survey round last year. This is equivalent to some 2.29 million jobless Filipinos, down from 2.36 million in April 2018.
Underemployment rate — the proportion of those working but looking for more work or longer working hours in order to increase income — improved to 13.5% from 17%. That amounted to 5.71 million Filipinos in April, down from 6.94 million the past year.
Among the April LFS rounds, both the unemployment and underemployment rates in April 2019 were the lowest since 2005, the year the government adopted new definitions for the LFS.
The size of the labor force was approximately 44.53 million out of an estimated 72.54 million Filipinos aged at least 15 years old, yielding a labor force participation rate (LFPR) of 61.4%. This was higher than last year’s 60.9%.
The employment rate, which is the proportion of the employed to the total labor force, edged up to 94.9% in April from 94.5% in the past year’s round.
In a statement, the National Economic and Development Authority (NEDA) said that around 1.3 million jobs were generated during the period, “more than double” the 625,000 generated in April 2018.
“The April 2019 round of the LFS reflected an upbeat labor market, where unemployment rate was at a low 5.1% and underemployment rate at 13.5%; these, even with the slight uptick in labor force participation,” Socioeconomic Planning Secretary Ernesto M. Pernia said in a statement.
Commenting on the results, Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, Inc. (UnionBank), said that the improvement in the labor market “speaks of the Philippines’ robust economic growth.”
“Although economic growth softened last year and first-quarter growth was below average at 5.6%, economic expansion, in general, can still be considered solid and respectable,” he said.
ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa described the latest labor data as “an encouraging sign as an increase in participation rate could mean more people remain or are now more hopeful of finding employment.”
“Given solid growth prospects, job seekers are now returning,”he said.
Mr. Mapa likewise cited improvement in unemployment rate, with job creation driven by services, particularly wholesale and retail trade. “This largely reflects the first-quarter rebound in gross domestic product for this sector with lower inflation helping drive a recovery in sales,” Mr. Mapa added.
By major economic sector, the proportion of those employed in services to total employment improved to 58.5% in April 2019 from 56.4% in April 2018. “The expansion [in services] may be attributed to increased business activities in line with the campaign period for the Philippine mid-term elections. Adding to this is the increase in consumer demand during summer and harvest seasons,” Mr. Pernia said.
Employment in industry and agriculture made up 19.2% and 22.3% of the total number of employed persons, respectively, down from the past year’s 19.7% and 23.9%.
Full-time workers — those who worked for at least 40 hours in a week — accounted for 67.6%, down from 68% in April 2018.
Part-time workers accounted for 31.3% of employed persons, up from 31%.
The April 2019 LFS round also showed that working hours per week averaged 41.7 hours, down from 42 hours a year ago.
“With inflation still expected to remain well within target, we can expect the services sector to help continue generating employment opportunities while we hope agriculture can see marked improvement now that the dry spell is over,” ING Bank’s Mr. Mapa said.
“Meanwhile, the recovering PMI (Purchasing Managers’ Index) manufacturing data could also mean that employment opportunities remain in the manufacturing sector and we hope this growth in economic activity can absorb the rest of the workforce after graduation.”
For UnionBank’s Mr. Asuncion, “[t]he second half of 2019 and early 2020 is expected to be better as inflation levels decline further.”
“Lower price levels impact domestic demand encouraging economic expansion and, thus, employment generation. Furthermore, with corresponding unwinding of monetary policy by the BSP (Bangko Sentral ng Pilipinas), economic growth can continue and stronger employment growth may result.”
The latest monthly survey IHS Markit conducted for Nikkei, Inc. showed the seasonally adjusted Nikkei Philippines Manufacturing PMI increasing to 51.2 in May from 50.9 in April, signaling a “modest, but stronger improvement in the health of the manufacturing sector.”
It was the first time in six months that the country’s headline PMI increased.
On the other hand, inflation clocked in at 3.2% in May, faster than April’s three percent, but slower than May 2018’s 4.6%. Prior to this uptick, inflation had decelerated for six straight months following the nine-year-high 6.7% in September and October 2018.
Mr. Pernia said that these gains made in reducing unemployment and underemployment should be sustained, citing the need to lower both indicators to successfully meet the Philippine Development Plan (PDP) targets by 2022.
“Both quality and quantity of work need to be addressed. At the same time that employment opportunities are being increased, workers and jobseekers must be enabled to improve their knowledge and skills through training and education,” Mr. Pernia said.
The PDP targets unemployment to decrease to 3-5% by 2022, equivalent to 950,000-1.1 million new jobs generated each year “assuming a slight increase in the [LFPR] to 64.1%.” — Christine Joyce S. Castañeda