By Marissa Mae M. Ramos
LABOR turnover at the country’s large firms eased in the fourth quarter as hiring slowed, according to a report by the Philippine Statistics Authority (PSA).
Preliminary results from the PSA’s Labor Turnover Survey showed that the labor turnover rate — the difference between the rates of accession and separation within firms — settled at 0.6% during the three months to December, slower than the downward-revised 0.8% in the third quarter of 2018.
This means that for every 1,000 persons employed, large firms were hiring six additional workers on a net basis in the fourth quarter.
The rate of accession — which represents hiring by employers to either replace former employees or expand their work force — stood at 8% in the fourth quarter, down from 9.5% in the preceding quarter.
The rate of separation — covering termination and resignation — stood at 7.5%, also down from 8.7% in the previous survey period.
Breaking down the accession rate, more people were hired in the fourth quarter due to business expansion at 4.2% compared to those who were employed as replacement for former employees at 3.8%.
For the separation rate, employee-initiated separation or resignations stood at 4.3% while the rate of employer-initiated separation or layoffs was 3.1%.
In an e-mail, Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort said that sustained net job creation despite higher inflation last year “fundamentally reflects” the relatively fast expansion of the Philippine economy in 2018 at 6.2% that — despite a slowdown from 2017’s 6.7% — still made it among the fastest-growing economies in Southeast Asia.
“[T]he country’s improved economic and credit fundamentals in recent years… as well as the country’s improved demographics, make the country an attractive market or destination for foreign investments that create more local employment,” Mr. Ricafort said.
The agriculture, forestry and fishing sector’s accession rate of 6.8% outpaced its separation rate of 4.2%, resulting in a labor turnover rate of 2.5%.
Mr. Ricafort saw the sector’s net positive job creation as an improvement in the fourth quarter following damage caused by Typhoon Ompong on Sept. 15, 2018.
Services also saw a net job creation rate of 1.2% with an 8.5% accession rate and 7.2% separation rate. With the exception of professional, scientific, and technical activities (-2.3%); real estate activities (-0.3%); and “other service activities” (-0.1%), all other service subsectors recorded positive turnover rates.
On the other hand, industry posted a negative job creation rate (-1.7%) with a 6.8% accession rate versus a 8.5% separation rate.
Pulling down the sector were negative turnover rates in construction (-3.4%); manufacturing (-1.6%); and mining and quarrying (-1.4%).
“The negative turnover in the industry sector may reflect some slowdown in manufacturing and other industries especially [for] some exporters and importers that were adversely affected by slower global economic growth and global trade largely due to the US-China trade war as well as by Brexit uncertainties,” Mr. Ricafort said.
For this year, Mr. Ricafort expects recovery from key sectors due to higher infrastructure spending from the government’s “Build, Build, Build” program.
“Sustained growth in OFW (overseas Filipino workers) remittances, BPO (business process outsourcing) revenues, foreign tourism, and net foreign direct investments… would all sustain the relatively faster economic growth of the Philippines compared to most of the other Asian countries and fundamentally entail the creation of more local jobs/employment and business opportunities as well,” he added.