by Louise Maureen Simeon – The Philippine Star, 8 Sep 2021
MANILA, Philippines — The country’s jobless rate hit its lowest level since the start of the pandemic, but more Filipinos are still on the lookout for additional hours of work as the quality of jobs available in the labor market has yet to improve.
Based on the latest report of the Philippine Statistics Authority (PSA), the labor situation in the Philippines improved in July as the unemployment rate eased to 6.9 percent from 7.7 percent in June.
This accounts for 3.07 million unemployed Filipinos in the labor force, with the latest print being the lowest since January 2020. Pandemic restrictions were eased in July, which allowed the economy to reopen and businesses to provide additional jobs.
It may be short-lived, however, as the unemployment rate will likely increase again in August following the reimposition of mobility curbs in the capital and nearby economic hubs.
While unemployment eased, the bigger concern is the underemployment rate, pertaining to the proportion of workers looking for more hours of work.
Underemployment surged to 20.9 percent or 8.69 million Filipinos from 14.2 percent or 6.41 million in June. This means that more than two million additional Filipinos failed to get enough work hours to earn adequate income.
The average weekly hours of work of an employed person increased to 41.8 hours from 39 hours in June. Underemployment was highest in MIMAROPA at 31.2 percent followed by the Bicol Region at 30.4 percent.
Leonardo Lanzona, labor economist and professor at the Ateneo De Manila University, said underemployment is a more crucial indicator of the labor market and its increase is a sign of poor work quality.
“People cannot afford to be unemployed and so they will accept any job offer or opportunity given to them. Large sectors have closed because of the pandemic,” he told The STAR.
He added that the issue is then structural in nature and any form of monetary response, which could have worked in a financial crisis, is inadequate.
“Unless a new industrial policy that will absorb the workers laid off by the pandemic is developed, the problem of poor work quality will be longer lasting,” Lanzona said.
It should also be noted that the country’s labor force participation rate, or Filipinos aged 15 years and above, declined to 59.8 percent of the total working age population from 65 percent.
This is equivalent to around 44.74 million economically active Filipinos, whether employed or looking for work, a significant drop from the 48.84 million in June.
Lanzona explained that the decline in labor force participation can be an indication of discouragement among Filipinos.
“Seeing that jobs are not available anyway or wages are not going to compensate their efforts, many workers decided not to participate in the labor force,” he said.
PSA chief Dennis Mapa said some seven percent or 2.08 million Filipinos did not participate and that contributed to the decline in participation rate.
“Of that, 5.9 percent gave COVID-19 as the reason while 1.1 percent said they are having a hard time looking for jobs or they think they have no chance of finding one,” Mapa said.
In a joint statement, the country’s economic managers said the government will continue to strengthen healthcare capacity, accelerate the vaccination program, and impose more targeted granular lockdowns to enable more people to safely join the labor force and earn a living.
To address the current labor woes, Lanzona said the government should set up an effective employment program that can create more opportunities for the poor.
“This cannot be done overnight and so even with the lockdown, the policy should be developed. So far, the government has relied on monetary policies that are of limited efficacy,” he said.
The economic team said the government will continue pursuing structural reforms to provide the country with a strong foundation for growth beyond the pandemic as it called on lawmakers to swiftly pass needed legislation.
These include amendments to the Public Service Act, Retail Trade Liberalization Act, and Foreign Investment Act, to help the country attract more foreign investments and build better infrastructure.
Meanwhile, the industries that showed the largest increase in job creation include administrative and support service activities at 462,000, construction at 411,000, and education at 223,000.
Decreases, on the other hand, were recorded in agriculture and forestry, wholesale and retail trade, and mining and quarrying.
Around 1.8 million of the month-on-month job loss came from the agriculture sector as typhoon Fabian hit the country around mid-July, destroyed some P700 million worth of output, and affected multiple regions in the country. The African swine fever also continues to affect hog raisers.
Workers are grouped into the three sectors, namely, agriculture, industry, and the services sector. Those in the services sector comprised most of the employed persons accounting for 57.9 percent share during the period.
Services sector was followed by agriculture with 22.1 percent share while the industry sector accounted for the smallest share of 20 percent.
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