Jobless rate eases, underemployment rises in July 2018

MANILA, Philippines — Unemployment in the country eases as the jobless rate in July dropped to 5.4 percent from 5.6 percent in the same month last year, although high underemployment continues to persist, data from the Philippine Statistics Authority (PSA) showed.

Based on the results of its July Labor Force Survey (LFS), the PSA reported that employment rate in July was estimated at 94.6 percent, slightly higher than the 94.4 percent rate in July last year.

The PSA said an estimated 40.7 million persons were employed in July, higher than the 40.2 million last year.

“This is the highest among previous July rounds in the last 10 years and similar to July 2016, with an estimated net generated employment of 488,000 and reaching total employment of 40.7 million,” the National Economic and Development Authority (NEDA) said.

Socioeconomic Planning Secretary Ernesto Pernia said the July employment figures puts the government on track to meeting its target of 900,000-1.1 million employment generation for 2018.

“An average of 1.17 million additional employment has been created so far in the first three rounds of the Labor Force Survey. With remarkable improvements, the government should not let up on its efforts to continually improve the employment situation in the country,” Pernia said.

The services sector accounted for more than half of the country’s total employment at 57.5 percent, contributing additional employment of more than 1.1 million.

This was followed by the agriculture sector, accounting for 23.1 percent of total employment.

In addition, the industry sector accounted for 19.4 percent of total employment and recorded positive employment growth of 2.2 percent, or 172,000 additional jobs. Among industry sub-sectors, the manufacturing sector contributed the largest during the period.

“This is consistent with the strong expansion plans of manufacturing firms as a result of a more positive employment outlook for the period,” NEDA said.

Despite the increase in overall employment, the underemployment rate jumped to 17.2 percent or an estimated seven million workers in July from 16.3 percent or 6.5 million workers in the same period last year.

Underemployment refers to full-time workers who seek additional hours of work.

Moreover, youth unemployment remains relatively high at 14.1 percent.

“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. A stronger academe-industry linkage should orient students better on career prospects,” Pernia said.

“In order to meet our employment targets, government should provide an environment that is conducive to creating more and better jobs. It should prioritize policies and programs that address the issues of unutilized youth, unemployed youth, underemployment and vulnerable workers,” Pernia added.

He said that poor low-skilled workers must be provided access to education and skills development programs that will provide lifelong learning opportunities, and that will respond to the changing needs of the labor market, especially in the context of disruptive technologies.

He also pushed for the reform of labor laws to provide better social protection to workers, while also improving labor market flexibility to maintain competitiveness and create more jobs.

“This package of reforms should include unemployment insurance as an additional safety net and important complement to labor market flexibility,” Pernia said.

“In other words, we need to keep the labor market agile such that more workers and employers can take better advantage of growth opportunities, while still looking after our workers’ welfare,” Pernia added.