February 4, 2023

Filipino Guardian

Sentinels of Filipino Free Press

Unemployment rate back to pre-pandemic levels

Men and women line up during a job fair at a covered courthouse in Tondo, Manila November 21. – PHILIPPINE STAR/EDD GUMBAN

THE UNEMPLOYMENT RATE fell to 4.5% in October, returning to the record low last seen in October 2019 before the outbreak of the coronavirus pandemic, the Philippine Statistics Authority (PSA) said.

Preliminary results from the PSA’s Labor Force Survey (LFS) showed that the unemployment rate was 4.5% in October, down from September’s 5% and 7.4% a year earlier.

“That takes us back to where we were in 2019. The last time we saw this was in October 2019 when we also had an unemployment rate of 4.5%,” said PSA Undersecretary and national statistician Claire Dennis S .Mapa during a press conference on Wednesday.

Unemployment rate back to pre-pandemic levels

According to the PSA, that meant 2.241 million Filipinos were out of work in October, down from 2.497 million in September and 3.504 million in the same month last year. This was also the lowest number of unemployed Filipinos since October 2019.

In the first 10 months of the year, the unemployment rate averaged 5.6%, below the 7.8% average in 2021.

“The continued recovery of the country’s labor market reaffirms our confidence that our policies and interventions to revitalize our economy are working,” Arsenio M. Balisacan, Minister for Socio-Economic Planning, said in a statement.

Meanwhile, job quality continued to improve in October as the underemployment rate fell to 14.2% from 15.4% in September and 16.1% a year ago.

The October underemployment rate, or the rate of employed Filipinos looking for more jobs, was the lowest since the 13.8% reported in July.

In the period January to October, the underemployment rate averaged 14.4%, compared to 16% a year earlier.

In absolute terms, the number of underemployed Filipinos fell to 6.673 million in October, from 7.326 million in September and 7.044 million in the same month in 2021.

Mr Mapa said sectors that benefited from the upturn in economic activity saw less underemployment. These included agriculture, forestry, retail, manufacturing, lodging and food service, he said.

However, the size of the total labor force shrank to 49.348 million in October from 50.080 million in September. That’s slightly more than the 47.325 million in October 2021.

This resulted in a labor force participation rate (LFPR) – or the proportion of the labor force in the total population aged 15 and over – of 64.2%. The October rate is lower than September’s 65.2% but higher than the 62.6% a year ago.

Mr Mapa said the drop in LFPR may have been due to seasonality, as young people aged between 15 and 24 may have returned to school during this time.

In October, the employment rate rose to 95.5%, up slightly from 95% in September and 92.6% in the same period a year ago.

This equates to 47.106 million Filipinos in employment, down from the 47.583 million in the previous month but up from the 43.822 million in October 2021.

On average, a employed Filipino worked 40.2 hours a week in October, up from 39.6 hours in September and 39.7 hours in October last year.

“With the 40 hours… this is a factor due to the holiday season. So we have a lot of extended opening hours in the malls and even in the shops,” Mr Mapa said.

The service sector remained the top employer during the month, accounting for 59.2% of the total. Agriculture and industry follow with 22.5% and 18.3% respectively.

The number of Filipinos employed in agriculture reached 10.605 million, down 102,000 from September’s 10.707 million and 163,000 down from 10.768 million a year ago.

The industrial sector employed 8.635 million Filipinos, adding 214,000 jobs to the previous month’s 8.849 million. This was also 823,000 more than the 7.812 million last year.

However, in services, the number of people employed fell by 159,000 month-on-month to 27.867 million in October. However, it was 2.626 million higher than the 25.241 million for the same month in 2021.

There were fewer jobs in agriculture and forestry (down 367,000 to 9.219 million in October); manufacturing (down 785,000 to 3.667 million); water supply; wastewater, waste management and sanitation activities (down 7,000 to 53,000); transport and storage (down 73,000 to 3.389 million); wholesale and retail trade; and repair of automobiles and motorcycles (down 333,000 to 10.376 million).

Meanwhile, there was a significant increase in jobs in fisheries and aquaculture (up 265k to 1.386m); Mining and Quarrying (up 30,000 to 237,000); electricity, gas, steam and air conditioning supply (by 38,000 to 101,000); and construction (up 510,000 to 4.577 million) among others.

ING Bank NV Manila chief economist Nicholas Antonio T. Mapa attributed the decline in the number of unemployed Filipinos to improving economic activity as the economy reopened.

“However, if we look at the actual number of people employed, we can see that this number has actually decreased (from 47.58 million to 47.11 million), with the participation rate falling. This suggests that while there were gains, part of the drop in the unemployment rate is due to fewer workers looking for work,” he said in an email.

Sentro ng mga Nagkakaisa at Progresibong Manggagawa Secretary-General Joshua T. Mata said payrolls typically pick up in the fourth quarter when economic activity picks up ahead of the holiday.

“But despite some possible improvements in job quality, as measured by underemployment, labor slack still stands at almost 20% of the labor force. That means nearly one in five Filipino workers is unproductive due to unemployment and underemployment. This is the usual level of structural unemployment we had before the pandemic,” Mr Mata said in a text message.

However, he noted that job growth could slow in 2023 amid global headwinds.

“Once the surge in demand in Q4 is over early next year, we could see slower job growth. It’s really hard to stay optimistic, especially when we can’t see concrete measures being taken by the government to guarantee jobs,” Mr Mata said.

Asian Institute of Management economist John Paolo R. Rivera is optimistic that more jobs will be created in the coming months.

“Assuming prices stabilize and the economy is able to welcome more FDI (foreign direct investment), enabling new business and employment opportunities, more Filipinos will be able to secure employment opportunities,” said Mr. Rivera in an email.

Headline inflation rose to 8% in November from 7.7% in October, the highest in 14 years or since 9.1% in November 2008. – Mariedel Irish U. Catilogo