Less Filipinos jobless, seeking more work

By Carmina Angelica V. Olano
Researcher
LATEST data show a decline in the country’s unemployment rate and underemployment rates in January, the government’s statistical agency reported on Thursday.
At the same time, the period saw a decline in the number of employed Filipinos even as the ranks of the unemployed went down. This can be explained by the decline in the participation rate, which indicates more Filipinos have left the labor force.

Preliminary results of the January 2019 round of the Labor Force Survey (LFS) conducted by the Philippine Statistics Authority put the country’s unemployment rate at 5.2%, down from the 5.3% recorded in the same period last year.
This is equivalent to 2.29 million jobless Filipinos, down from 2.32 million in January 2018.
Likewise, the underemployment rate — the proportion of those working, but still looking for more work or longer working hours — improved to 15.6% from 18%. This corresponds to around 6.45 million Filipinos underemployed compared to 7.5 million the previous year.
Among the January LFS rounds, January 2019’s unemployment rate was lowest since 2005, the year the government adopted new definitions for the LFS.
The same could be said for underemployment, considering that rates go as high as above 20% in past LFS rounds.
The size of the labor force in January was approximately 43.659 million out of the 72.524 million Filipinos 15 years and older, yielding a participation rate of 60.2%, lower than the year-ago 62.2%.
The employment rate, which is the proportion of the employed to the total labor force — inched up to 94.8% in January from 94.7% in the same round last year.
However, the National Economic and Development Authority (NEDA) noted in a statement that the number of employed persons in the latest survey was lower by 0.9% or 387,000 to 41.4 million versus the 41.8 million employed in January 2018.
“This was mainly due to the 1.7 million employment loss in the agriculture sector, which overshadowed the combined 1.3 million additional employment in industry and services sectors,” NEDA said in its statement.
The employment rate in agriculture was 22.1% in January, down from 26% in the same round last year.
Meanwhile, the employment rate in services improved to 58.1% from 55.9% while that of industry rose to 19.7% from 18.1%.
NEDA noted the rising cost of inputs amid low profit, limited access to credit, poor infrastructure, and vulnerability to environmental risks that have contributed to the continued decline of workers in agriculture.
“The prevalence of low-productivity jobs in the agriculture sector remains a challenge. Sustainable solutions such as shifting rice farmers to high-value crops, promoting crop diversification, accelerating development of local infrastructure and training for farmers on technological advances are critical to raising productivity in agriculture,” NEDA quoted its director-general, Socioeconomic Planning Secretary Ernesto M. Pernia, as saying.
Full-time workers — those who worked for at least 40 hours in a week — increased to 71.7% from 63.6% in January 2018. Part-time workers accounted for 27.7% of employed persons from 35.2%.
The January round of LFS also revealed that working hours per week averaged 43.2 hours, up from 40.6 hours a year ago.
“The overall improvements in the proportion of remunerative work and full-time employment, as well as the decline in underemployment and vulnerable employment, indicate that the quality of work in the country is continuously progressing,” Mr. Pernia said.
For Rizal Commercial Banking Corp. (RCBC) economist Michael L. Ricafort, the decline in unemployment was “widely expected,” ascribing it to the continued growth of labor-intensive industries like retail, real estate, construction, business process outsourcing, manufacturing and tourism.
He added that higher-paying construction jobs “partly lured away” some workers from the agriculture sector, especially those in fast-growing provinces outside Metro Manila.
Mr. Ricafort also noted the lower participation rate that was brought about by the smaller number of employed and unemployed Filipinos in January.
“[T]his could be a signal that some people withdrew from the local job market as this might indicate some people looked for jobs overseas, instead of applying for work locally,” he said.
For Union Bank of the Philippines, Inc. (UnionBank) chief economist Ruben Carlo O. Asuncion, the country’s unemployment rate in January was “quite a surprise.”
“It must be considered that GDP (gross domestic product) growth last year was lower than [in] previous years. I did expect that unemployment might be the same or even worse than the previous period. This may mean that there were better and real opportunities for the labor force considering the challenges to economic growth last year,” Mr. Asuncion said.
“Aside from increased availability of jobs, the quality of jobs might have also improved. Jobseekers find jobs, while those looking for better jobs actually get them as well.”
In a research note, global think tank Nomura estimated the country’s seasonally adjusted unemployment rate at 5.1%, which “sustains a downtrend that has become more pronounced over the last few years.”
“In addition to the near-term boost from election-related spending, falling unemployment supports the strong rebound in household consumption that we expect this year and drives our above-consensus 2019 GDP growth forecast of 6.8%, up from 6.2% in 2018,” Nomura said.
To recall, the Philippine economy grew by 6.2% in 2018, dragged by slower-than-expected GDP growth of 6.1% in the fourth quarter.
For UnionBank’s Mr. Asuncion, an improvement in agriculture employment could improve the overall employment situation in the country further, noting that the sector employs most of the country’s poor.
“Agriculture has been the drag on our economy. It has limited the opportunity to cut unemployment significantly. Just imagine if agriculture growth will be secured and expanded, it will definitely be an important contributor to economic growth and additional employment where jobs are needed badly,” Mr. Asuncion said.
“As investment-led economic growth in the country continues, UnionBank’s Economic Research Unit sees unemployment and underemployment continue to decline,” he added.
“However, agriculture employment is expected to be meager and thus a drag to the overall picture of the labor force in the country.”
RCBC’s Mr. Ricafort likewise expected labor conditions to improve this year on the back of slowing inflation, easing borrowing rates and the rollout of more public infrastructure projects.