More jobs generated as Q3 starts, but quality erodes

By Jochebed B. Gonzales, Senior Researcher
LATEST labor data in July bared a mixed picture as unemployment eased, but those wanting more work increased.
Preliminary results of the July 2018 round of the Philippine Statistics Authority’s Labor Force Survey put the country’s unemployment rate at 5.4% compared to 5.6% a year ago. That was equivalent to 2.323 million jobless Filipinos from 2.373 million in July 2017.
At the same time, the quality of available jobs deteriorated as the underemployment rate — the proportion of those already working but still looking for more work or longer working hours — increased to 17.2% from 16.3% in the same comparative periods, equivalent to 7.005 million Filipinos, from 6.541 million a year ago.
The size of the labor force was approximately 43.008 million out of the 71.560 million population of Filipinos 15 years and older for a participation rate of 60.1%, which declined from 60.6% a year ago.
Services and industry saw their share of employment go up to 57.5% (from 55.6%) and 19.4% (from 19.2%), respectively.
But employment in agriculture fell to 23.1% from 25.2%.
Much of increased underemployment was seen in Industry, with a 20.8% rate in July that was worse than last year’s 20.1%.
Underemployment rate in agriculture went down to 32.4% from 33.1%, while that of services steadied at 46.8%.
The National Economic and Development Authority (NEDA) said in a statement that July’s unemployment reading was “one of the lowest unemployment rates recorded for all surveys conducted in the July rounds since 2008.”
“An average of 1.17 million additional employment has been created so far in the first three rounds of the Labor Force Survey. And this puts the government on track in meeting its target of 900,000-1.1 million employment generation for 2018…” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the NEDA statement as saying.
NEDA, however, noted that youth unemployment “remains relatively high” at 14.1%. “The share of inactive youth remains a concern. The government must equip students with industry-relevant competencies as well as increase their opportunities for work experience,” Mr. Pernia said.
Economists welcomed the latest employment turnout but pointed out the need to address underemployment.
“Dipping unemployment is good news, but increasing underemployment tells you the quality of jobs that comes out, or some of the weaknesses of the labor force [where people and the jobs available are a mismatch] and they end up being underemployed,” said Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines (UnionBank).
Jefferson A. Arapoc, economist at University of the Philippines (UP), blamed inflation for the worsening underemployment.
“[The] [h]igh inflation rate results in lower purchasing power that could potentially make people look for more income-generating activities,” Mr. Arapoc said.
Commenting on the latest labor data, Nagkaisa Labor Coalition spokesperson Rene Magtubo said that while there were additional jobs for the period, many were not permanent or regular in nature, which explains the increase in the number of workers looking for more work.
“This is symptomatic of an economy driven largely by the services sector that generates casual or temporary jobs while industry and agriculture sectors — which generate or permanent jobs — are lagging behind,” he said.
Alan A. Tanjusay, spokesperson of the Associated Labor Unions-Trade Union Congress of the Philippines, shared this view.
“The stark difference between unemployment and underemployment goes to show that there is employment opportunity in the country. However, due to [the] prevailing… contractualization and Endo (end of contract) practice, the quality of jobs is getting worse,” Mr. Tanjusay said in a statement, referring to the practice of hiring workers in successive five-month periods, allowing firms to skip benefits given to permanent workers.
Mr. Tanjusay also said that the problem is “compounded” by the eroding buying power of wages “which is getting smaller every day.”
Moving forward, economists remained optimistic on the employment situation for the coming months.
“I’m still positive,” said UnionBank’s Mr. Asuncion on job growth as he cited higher-than-expected foreign direct investments in the second quarter as well as remittances and business process outsourcing.
UP’s Mr. Arapoc said that the government should also look into the development of the agriculture sector.
“The rolling out of the government’s ‘Build Build Build’ program offers a positive prospect to the country’s employment situation,” he said.
“However, the government must be able to make necessary intervention to boost the agricultural sector. This sector barely contributed in the GDP (gross domestic product) growth last quarter.” — with Gillian M. Cortez