April unemployment down at 6.4% – LFS

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Unemployment in the Philippines dropped to 6.4 percent in April from 7 percent a year earlier, with additional jobs boosting the employment rate slightly, preliminary figures from the Labor Force Survey (LFS) show.

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The jobless rate also declined from 6.6 percent in January 2015, according to the LFS figures, released on Tuesday by the Philippine Statistics Authority (PSA).

The PSA explained, however, the April LFS data does not reflect the employment situation in the whole country, with Leyte province still excluded from the survey.

“The province of Leyte was not covered in the April 2015 LFS. A new sampling frame for the province of Leyte has to be created. This is because of the large number of households in Leyte which were displaced by typhoon Yolanda,” the agency said in a technical note.

The employment rate in April was at 93.6 percent, showing a slight increase from 93 percent in the corresponding month last year and from 93.4 percent recorded in January 2015.

The underemployment rate, or the percentage of the underemployed against the total number of workers fell to 17.8 percent from 18.2 percent a year earlier and from 17.9 in January.

The National Economic and Development Authority (NEDA) attributed the improvement in the labor data to the continued strength of the economy.

However, a private analyst said the additional jobs during the period may have just shown a seasonal increase.

Favorable job market
Focusing on the reduction in the country’s unemployment and underemployment rates in April, the NEDA said the new set of data indicates a favorable job market.

The agency explained that the unemployment rate of 6.4 percent translates to 495,000 more employed Filipinos, which reduced the total number of unemployed to 2.68 million from 2.92 million a year earlier.

“It is noteworthy that the improvement in the employment situation appears to be broad-based,” said Socioeconomic Planning Secretary Arsenio Balisacan.

Balisacan, who is also the NEDA Director-General, pointed out that 13 out of 17 regions, including Metro Manila, showed a decline in unemployment during the survey period.

Still, Metro Manila continued to post the highest unemployment rate of 9.3 percent, while the Autonomous Region for Muslim Mindanao (ARMM) recorded the lowest rate of 3.2 percent, he added.

Total employment up 1.26%
Meanwhile, the NEDA reported that employment in April involved a total of 39.16 million jobs, up 1.26 percent from 38.66 million created a year ago.

This means 495,000 more Filipinos gained employment during the period, the agency said.

The PSA data showed that workers in the services sector accounted for 52.8 percent of the total number of employed Filipinos.

In the industry sector, workers in manufacturing made up the largest group, accounting for 50.8 percent of the total people employed in the sector, the PSA said.

Reduced number of underemployed
The NEDA said the underemployment rate, which eased to 17.8 percent in April, accounts for 44,000 Filipinos who are no longer underemployed, reducing the total number of underemployed people in the Philippines to 7 million. They are employed persons who wanted more work during the period.

The NEDA chief said majority of those in the the labor force who are employed in more remunerative and stable work increased by 1.9 percent, reaching 22.6 million in April 2015.

They now comprise 57.8 percent of the total workers, slightly higher than their 57.5 percent share from a year ago, he added.

Surpassing the target
Balisacan said if these developments in the labor market are sustained during the rest of the year, the full-year average could reach a better level than the targets set for the Philippine Development Plan of 6.6 percent to 6.8 percent for the unemployment rate and 18.0 percent for the underemployment rate in 2015.

To ensure that the gains in employment are sustained, the government must continue its interventions in the agriculture sector and pursue adequate infrastructure spending to boost economic growth and employment, Balisacan said.

The NEDA chief stressed the need to implement disaster risk management strategies and other precautionary measures in the agriculture sector against drought, floods, and rain-induced landslides in hazard prone areas.

This is to mitigate, as well as prevent any further adverse effects of natural disasters on the country’s economy, especially on employment, he added.

“To continue the gains, we need to speed up the implementation of key reforms such as public infrastructure development, reducing investment restrictions, increasing competition, reducing the cost of doing business. If implemented, these can help lift the key constraints to sustained, job-generating growth,” he concluded.

Seasonality
Justino Calaycay, analyst at the Accord Capital Equities Corp., however, said the improvement in April data could be seen as a seasonal factor, occurring around Christmas when there could have been a temporary spike in employment generation.

“In addition, part of this could also be attributed to the ongoing construction projects, as well as the robust view of businesses moving forward, driven, in turn, by sustained growth in consumer spending,” he said.

Acknowledging the seasonal increase in temporary employment during the election season, Calaycay said the government will have to stay focused on the creation of quality jobs and not be drawn into the election cycle fever.

“Given this backdrop, we should see further improvements in the jobs numbers in the next four quarters. This in turn, will be a much needed boost to the economy, which faltered to a slow 5.2 percent in the first quarter,” he added.

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