April job situation better than a year ago

By Lourdes O. Pilar, Senior Research Associate, Businessworld, http://www.bworldonline.com/content.php?section=TopStory&title=april-job-situation-better-than-a-year-ago&id=128786

THE RANKS of the jobless shrank last quarter from a year ago, as employment increased in the sectors of the economy that fueled growth in that period.

According to results of the latest Labor Force Survey (LFS) released yesterday, the country’s unemployment rate eased to 6.1% last April, from 6.4% in the same month last year, even as it was up from January’s 5.8%. This means the number of jobless Filipinos dropped to 2.594 million at the end of the first quarter from 2.681 million in 2015’s comparable three months.

The labor force participation rate — labor force as a percentage of total population aged at least 15 years old — eased to 63.6% from 64.6% a year ago.

The National Economic and Development Authority (NEDA) said the latest jobs number “is at the high-end range of previous April rounds of the LFS since 2011.”

“These employment numbers are a reflection of the country’s vibrant economy,” NEDA Director-General Emmanuel F. Esguerra said in a statement. “If the labor market trends are maintained, the Philippine Development Plan target of 6.5-6.7% for unemployment rate in 2016 is likely to be achieved.”

More than half of the jobs in the first quarter were found in the services sector, led by wholesale and retail trade, where more than a third of service sector workers were employed.

The trade sub-sector’s high share of employment reflects the consumer-driven economic expansion in the first three months of 2016. The Philippines’ gross domestic product (GDP) grew by 6.9% in the first quarter, the fastest in more than two years, on the back of election-related and consumer spending.

Alvin P. Ang, economics professor at the Ateneo de Manila University, said the job gains were “notable” considering that the April round was met by a surge of new graduates. Many schools have yet to shift to the new K-12 system that would push back graduation to the second quarter.

A fourth of those with jobs had worked in agriculture, which however contracted by 4.4% in the first quarter. Consequently, the proportion of jobs in the agriculture sector fell to 25.0% this year from 29.3% in 2015.

“Low agri [employment] is [a] reflection of impact of El Niño,” said Ateneo’s Mr. Ang.

Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines, shared this view, saying that the El Niño may have prompted a migration of workers from agriculture to other sectors.

Less than a fifth of the employed had worked in industry, and was concentrated in two sub-sectors: construction and manufacturing. Construction, which grew 10.8% in the first quarter, had fueled the expansion of the industry sector for the period. Manufacturing grew by 8.1% over the same period.

QUALITY STILL WANTING

Despite the drop in the first-quarter jobless rate, the underemployment rate climbed to 18.4% from last year’s 17.8%. The underemployed pertain to those with jobs but who were still looking for additional income.

“Relatively more jobs — possibly election-related but not sustainable. That’s why underemployment is higher,” Ateneo’s Mr. Ang said.

LandBank’s Mr. Dumalagan agreed, saying: “[T]he quality of jobs created was not as good, as evidenced by the rise in the underemployment rate. Job gains in April might be sustained in May, but it might probably correct in June, as the increase in election-sensitive jobs dissipates.”

Going forward, the job outlook remains bleak for agriculture but bright for the usual leaders: business process outsourcing and manufacturing.

“Agriculture… is still expected to show weaker job gains because of bad weather conditions,” LandBank’s Mr. Dumalagan said.

“In the long run, growth in the country’s labor market rests on the shoulders of the next administration. There is definitely a need to improve the quality of jobs in the country, and more importantly, retain the talent has been going out the country because of insufficient opportunities domestically.”