Employment feat in 2011 boosts optimism for better economy this year

The improved performance of the labor market in 2011 bolsters the optimism for a better economy this year, according to Socioeconomic Planning Secretary Cayetano Paderanga Jr.

“Last year, the country generated more employment from the previous year. Employment level rose by 3.2 percent or 1.156 million, largely on the strength of the continued growth in services and the recovery in agriculture, although there was a slowdown in the industry sector,” said Paderanga during a Senate briefing this week.

He added that the quality of employment remained positive last year, with strong growth in wage and salary employment (4.6 percent), modest growth in full-time employment (1.5 percent), and slight easing of the unemployment rate (from 7.3 percent in 2010 to 7.0 percent in 2011), despite the increase in the labor force participation rate (64.1 to 64.6 percent).

Paderanga said the figures were taken from the results of the quarterly Labor Force Survey (LFS), which complies with international standards and guidelines prescribed by the United Nation’s International Labor Office.

When asked why the Philippines has a better unemployment figure compared to the United States, which has an unemployment rate of 8.3 percent in January 2012, Paderanga explained that this is because the character of our economy is different from those of developed nations.

“Sa Pilipinas, maraming trabaho na (In the Philippines, there are many jobs that) ordinarily in developed countries would not be thought of as work. Our problem, however, is that many of the employed are working in the informal sector, where the income levels are really quite low. We would like to produce more work in the formal sector,” said Paderanga, who is also Director-General of the National Economic and Development Authority (Neda).

The Cabinet official added that while the Philippines may have fewer unemployed persons, the country would compare unfavorably to developed economies in terms of underemployment, which increased from 18.8 percent in 2010 to 19.3 percent in 2011.

The unemployed is internationally defined as persons 15 years old and over without work, seeking work and available for work. On the other hand, the underemployed are those of the same age bracket that are already employed but want to have additional hours of work in their present job or an additional job, or to have a new job with longer working hours.

“In the Philippines, many of those already employed are finding themselves in jobs that they probably are not satisfied with. Marami ang (Many are) fully employed pero mababa ang sahod (but wages are low),” said Paderanga in explaining that a high underemployment rate is an indicator that per capita income is low. He added that the survey’s sample of 51,000 households makes LFS the most comprehensive data set on labor force that can be used for microanalysis on employment.

The joint briefing was attended by members of the following Senate and congressional committees: economic affairs; finance; banks, financial institutions and currencies; ways and means; trade and commerce; and special oversight committee on economic affairs.