July unemployment rate hits 1-year high

The country’s jobless rate rose to a one-year high of 4.7% in July as fresh graduates entered the workforce, the Philippine Statistics Authority (PSA) said on Friday.

Preliminary data from the PSA’s Labor Force Survey (LFS) showed the jobless rate in July picked up from two-decade low of 3.1% in June. It is the highest jobless rate since the 4.9% recorded a year ago.

This translated to 2.38 million unemployed Filipinos in July, up by 755,000 from 1.62 million in June.

Year on year, the ranks of the unemployed was up by 86,000 from 2.29 million in July 2023.

In the first seven months of the year, the unemployment rate averaged 4%, lower than the 4.7% average in the same period last year.

“Our youth unemployment this July increased. In terms of numbers, it reached 1.02 million and makes a 43% contribution to jobless Filipinos. It means that in the 2.38 million unemployed Filipinos, 1.02 million youth or Filipinos aged 15 to 24 years, contributed to the total unemployed population,” PSA Undersecretary and National Statistician Claire Dennis S. Mapa said in mixed English and Filipino during the press briefing on Friday.

Mr. Mapa also added that those who graduated from college and K-12 that entered the labor market but were not able to find a job also contributed to the total unemployment.

Youth unemployment rate rose to 14.8%, higher than the 8.6% in June and 14.2% in July 2023.

This translated to 1.02 million unemployed youth in July, up by 440,000 from June and 172,000 in July 2023.

Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said that inadequate quality jobs for the young workers contributed to the youth sector’s unemployment.

“With still elevated interest rates and the challenge of inflation volatility, finding a quality job may prove to be difficult. Even as easing key rates are expected, there exists a lag before firms and other businesses like SMEs (small and medium enterprises) respond to the less restrictive financial environment. I just hope it can be faster so that the youth can get jobs that they need,” Mr. Asuncion said in an e-mail.

Job quality was unchanged in July, as the underemployment rate steadied to 12.1%, but lower than the 15.9% in July 2023.

This translated to 5.78 million underemployed Filipinos or persons already working but still looking for more work or longer working hours, versus the 6.08 million in July and 7.07 in July 2023.

As of end-July, the average underemployment rate stood at 12.3%, lower than 13% in the same period last year.

The size of the Filipino labor force is estimated to be around 50.07 million in July, down by 1.82 million from June. However, the workforce size rose by 3.23 million from 46.85 million in July last year.

This brought the labor force participation rate (LFPR) — the share of the Filipino workforce to the total working age population of 15 years old and over — to 63.5% in July, declining from 66% in June but rising from 60% in July 2023.

Meanwhile, July employment rate dipped to 95.3% in July, lower than the 96.9% seen in June but slightly higher than the 95.1% in the same period a year ago.

This was equivalent to 47.70 million employed Filipinos, down by 2.58 million from 50.28 million in June, but up 3.14 million from 44.56 million in July 2023

From January to June, the employment rate averaged 96%, up from 95.3% a year ago.

The average Filipino employee worked for 41.1 hours per week, higher than the 40.9 hours in June but down from the 42.4 hours in June 2023.

The services sector remained the top employer in July with an employment rate of 60.8% followed by agriculture at 21.2% and industry at 18%.

“While welcoming the still-high employment rate as a positive development, despite our critique of the leniency of the technical definition that those working for even just one hour during the reference week as ‘employed,” we remain concerned about the quality of jobs and the labor market situation in the country,” Carlos Miguel S. Oñate, Trade Union Congress of the Philippines (TUCP) legislative officer, said in an e-mail.

Month on month, job losses in July were seen in construction (down 1.02 million); wholesale and retail trade; repair of motor vehicles and motorcycles (down 821,000 million) and agriculture and forestry (down 750,000).

Meanwhile, public administration and defense; compulsory social security 344,000 jobs in July on a monthly basis. Other sectors that posted monthly job gains were fishing and aquaculture (up 238,000) and financial and insurance activities (up 142,000).

Manufacturing recorded the largest annual drop in July (down 154,000), followed by professional, scientific and technical activities (down 100,000) and information and communication (down 76,000).

On the other hand, wholesale and retail trade added the biggest year-on-year employment gain in July (up 1.07 million), followed by agriculture and forestry (up 936,000) and accommodation and food service activities (up 512,000).

“It may take time for jobs creation and eventually rapid hiring. Nonetheless, the job environment is still expected to be better in the coming months,” said Mr. Asuncion. — Lourdes O. Pilar