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More Filipinos unemployed but job quality better in July

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By Marissa Mae M. Ramos
Researcher

LATEST labor data show the ranks of jobless Filipinos increased in July, but at the same time, the number of employed Filipinos wanting more work dropped to an all-time low, the Philippine Statistics Authority (PSA) reported yesterday.

Preliminary results of the July 2019 round of the PSA’s Labor Force Survey (LFS) showed the country’s unemployment rate at 5.4%, steady from the figure in the same round last year. Nevertheless, this is equivalent to 2.43 million jobless Filipinos compared to 2.33 million in July 2018.

At the same time, the quality of jobs improved as the underemployment rate — or the proportion of those already working, but still looking for more work or longer working hours — declined to 13.9% in July from 17.2% previously.

Both the latest underemployment and unemployment rates are the lowest among the July LFS rounds since 2005.

The employment rate remained unchanged at 94.6% in July albeit the number of employed Filipinos increased to 42.95 million from 40.65 million previously.




Labor force survey (July 2019)

“This translates to 2.3 million additional employment, almost five times the 479,000 employment generated in the same period last year,” the National Economic and Development Authority (NEDA) said in a statement.

NEDA also noted that the 5.2% year-to-date unemployment rate is near the upper end of the 4.3-5.3% target in the Philippine Development Plan 2017-2022.

The changes in the absolute figures despite steady unemployment and employment rates can be explained by changes in the labor force participation rate (LFPR), which is defined as the percentage of the total number of persons in the labor force to the total population 15 years old and over.

In July, the country’s LFPR stood at 62.1%, more than the 60.1% a year ago. This is equivalent to 45.38 million Filipinos in the labor force out of the 73.13 million Filipinos 15 years and older.

Likewise, the LFPR among the youth improved to 38.3% from 36.8%. However, unemployment in this segment remained high at 14.4% from 14.1% last year. The July figure corresponds to roughly 1.1 million of the 7.7 million in the labor force population aged 15-24 years old.

On the other hand, the proportion of youth not in employment, education and training shrank to 18.7% from 21.3% in July 2018.

UnionBank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion noted the increase in the number of employed and unemployed Filipinos. “This tells me that there are sectors that are lagging behind. There may be expansion in one sector and a regression in another,” he said in an e-mail.

Mr. Asuncion also noted the increase in the LFPR, which is a “good sign.”

“This means that more part of the population are either looking for work [or] are actually employed. This tells you the perception of the population about the economy and how it is expanding or growing,” he said.

“The improvement of the underemployment rate [among the younger part of the population to 1.8% from 2.3%] can be attributed to education reforms like the K to 12 program and potentially free college education. Another factor is the availability of more quality jobs in the economy and with continuous economic expansion comes the availability of not just jobs but also better jobs,” he added.

For Security Bank Corp. chief economist Robert Dan J. Roces, the latest LFS figures “show a relative stability” in terms of unemployment in the country.

“[R]ates have been hovering in the vicinity of 5 to 5.5% since mid-2017…” noted Mr. Roces in a separate e-mail. “The July 5.4% [unemployment] level also validates the view that we are relatively safe from the trade war, so far, with firms employing relatively the same number of workers.”

Moreover, Mr. Roces said that the declining underemployment rate “underscores the fact that more Filipinos have been finding more gainful employment opportunities that allow them to contribute realistically into the economic system.”

“Factors may have been the realignment of taxes for firms, which allowed the latter to create jobs in certain brackets,” he surmised.

By economic sector, services made up the majority of the employed population at 57.8% from 57.5% in the same period last year.

Employment in the agriculture sector, likewise, inched up to 23.5% from 23.1%.

On the other hand, employment share of the industry sector fell to 18.7% from 19.4%.

NEDA Undersecretary for Policy and Planning and current Officer-In-Charge Rosemarie G. Edillon said in the agency’s statement that full implementation of the Ease of Doing Business and Efficient Government Service Delivery Act, and the reduction of foreign investment restrictions would contribute to creating more employment opportunities for Filipinos.

“While the Philippine economy has shown remarkable improvements in the labor market, the government should continually improve its efforts towards generating more productive and higher quality employment that provides adequate income for Filipino workers and their families,” Ms. Edillon said.

For UnionBank’s Mr. Asuncion, employment is likely going to be “steady.”

“With economic growth expected to recover in the second half of 2019, labor demand is expected to increase accordingly,” he said.

“However, there may be job losses as well in sectors that are challenged by the status of the external environment, such as exports and other export products.”

Mr. Asuncion noted that jobs in the services and agriculture “are expected to grow” while that in industry-related jobs “may be challenged for the rest of the year.”

For Security Bank’s Mr. Roces: “[W]e expect it to remain relatively stable on the business cycle path.”

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