Jobless rate fall to 7.5% in Apr. misleading — Diokno

The unemployment rate fell to 7.5 percent in April from eight percent a year ago despite a global recession, but a top economist said the latest jobs data were misleading.

UP School of Economics Prof. Benjamin Diokno said the slight uptick in the headline employment rate, from 92 percent a year ago to 92.5 last April, was, at best, misleading because it conceals the continuing deterioration of the labor market.

“The labor participation rate has increased, which was a sign that living conditions have become more difficult,” Diokno noted.

He said that those who can afford not to work before have to look for a job now, no matter how low paying, because economic conditions have worsened.

National Statistics Office (NSO) data released yesterday showed that there were 37.8 million Filipinos in the labor force in April compared to 36.5 million in April last year.

“Quality jobs continue to disappear. Some 50,000 factory jobs in manufacturing were lost in the April 2009 survey while some 178,000 employers or entrepreneurs closed shop,” he added.

Diokno said decent, relatively high-paying jobs were also replaced by low-quality, part-time jobs.

“More part-time jobs were created, some 2.4 million, while close to 1 million or 952,000 full-time jobs were lost. Also, more workers have agreed to work for less hours as conditions become more difficult,” he said.

He also said there were 392,000 more unpaid family workers in April 2009 compared to a similar period last year. Under the definition of those employed the government adopted in 2005, such unpaid family workers were considered employed.

Underemployment, defined as those working under 40 hours a week, rose to 18.9 percent from 18.2 percent in January. The figure was down from 19.8 percent in April last year, the statistics bureau said.

The Department of Labor and Employment recently said more than 16 million of the country’s workforce were either “self-employed” or working in the “informal sector,” which includes people working as pedicab drivers or in family-run shops.

“There is clearly pressure on the labor market, not just due to economic slowdown, but also going forward with remittance growth showing further downside,” Simon Wong, economist at Standard Chartered Bank in Hong Kong, said.

“As more overseas workers feel pressure to return home, then that will increase pressure on the domestic labor market,” he said.

Jun Trinidad, economist at Citigroup in Manila, said the drop in the unemployment rate was partly due to the 105,000 in additional jobs created in the public sector as a part of the government’s fiscal stimulus package.

Still the Philippines has the second highest jobless rate among the biggest Southeast Asian economies, behind Indonesia which reported an unemployment rate of 8.14 percent as of February.

Thailand’s jobless rate was at 1.9 percent in February, below Malaysia’s 3.3 percent at end 2008. Singapore’s first quarter seasonally adjusted jobless rate was 3.3 percent, a 3-year high.

Job cuts and reduced work hours in the Philippines have been on the rise, mainly in the electronics sector, which accounts for over half of the country’s exports, with demand still weak.

At least 6,500 Filipino workers returned from abroad, mainly Taiwan, since October as the global recession hit the manufacturing sector, based on data from the overseas workers welfare agency. –Daily Tribune