Unemployment in the Philippines worsened to 6.6 percent in January from 5.7 percent a year earlier, when temporary jobs were created ahead of the May 2016 elections, the latest Labor Force Survey (LFS) showed.
This translates to 2.76 million jobless Filipinos in January 2017, compared with 2.46 million jobless in January 2016, LFS data released by the Philippine Statistics Authority (PSA) showed on Tuesday.
The increase in the number of unemployed Filipinos came from those with elementary education only (up by 128,000), followed by those who had high school education only (up by 88,000). But the bulk of the increase in the unemployed group was traced to adult workers (up by 181,000).
Consequently, the employment rate in January dropped to 93.4 percent from 94.3 percent a year earlier, according to the LFS results.
Pointing out the drop in employment due to the void caused by the elimination of election-related jobs, the National Economic and Development Authority (NEDA) said the same trend occurred in January 2011, the year that followed the 2010 elections.
However, the NEDA added that the unemployment rate in January 2017 reflected an improvement from the average 7.4 percent recorded from 2006-2015.
Election-related jobs gone
A market economist from the Land Bank of the Philippines agreed with NEDA’s view that the higher unemployment rate was due to election-related factors.
“The increase in the unemployment rate might be attributed to the decline in temporary jobs, which were created last year as a result of the election season,” Land Bank’s Guian Angelo Dumalagan said.
In the next few months, he said, unemployment may rise further as domestic economic activity normalizes from the election-spending boost that took place last year.
Employment rate drops
The employment rate in January dropped to 93.4 percent from 94.3 percent a year earlier.
The NEDA said this translates to 39.3 million employed Filipinos, down by 1.34 million or 3.3 percent from the number in January 2016.
“We mainly observe the employment losses in the agriculture sector, which has been greatly affected by typhoons Nina and Auring that hit our country last December and January,” said Socioeconomic Planning Secretary Ernesto Pernia.
The agriculture sector accounts for the second largest share of the total number of employed Filipinos at 25.5 percent, which reflects a shedding of about 882,000 workers, or two-thirds of the employment losses.
On the other hand, underemployment, which refers to the lack of enough jobs for those who are working but for less than 40 hours a week, declined to 16.3 percent from last year’s 19.7 percent. That means there were 1.6 million less underemployed workers than in the comparative year-earlier period.
The NEDA noted that this is lowest rate recorded for all LFS January rounds since 2006.
Landbank’s Dumalagan said the drop in the underemployment rate could indicate a general improvement in the quality of existing jobs in the country.
Meanwhile, Bank of the Philippine Islands Vice President and lead economist Emilio Neri Jr. said he is hoping that the drop in the underemployment rate is “due to structural factors, rather than just favorable weather, as agriculture and manufacturing had likely been the driver of the improvement.”
Infrastructure pipeline, agri
“The prospects for job generation may be enhanced with the long pipeline of infrastructure projects for implementation on a 24/7 work mode basis under the current administration,” Secretary Pernia said.
Given that several of these projects are going to be foreign-funded, he said the government must see to it that foreign contractors are made to agree to also recruit technical and blue-collar workers who are available in our domestic labor market.
“Critical interventions to address youth unemployment are enumerated in the Philippine Development Plan 2017-2022, particularly to reduce the number of youth who are neither studying nor employed, nor in training,” Pernia added.
He noted that scholarships and the strengthening of linkages with vocational and technical schools and state universities/colleges offering technical vocational education and training programs will provide access to a greater number of trainees.
“Policy and regulatory changes can also adversely affect employment. Government must continue skills development and retooling programs through continuing education and training for the affected workers, and adjust policies where warranted,” he said.
Pernia added that the government must focus its interventions on diversifying the sources of income for workers in the agriculture sector, increase women’s labor participation, and address youth unemployment.