Unemployment down, but underemployment up

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The total number of people employed gainfully in the country grew marginally in April, to 93.9 percent in April from 93.6 percent a year ago.

Thus, the unemployment rate dropped in April to 6.1 percent from 6.4 percent in April 2015, according to the Labor Force Survey (LFS) the Philippine Statistics Authority (PSA) released on Thursday.

The unemployment rate in April 2015 did not include the island of Leyte that was hit by Super Typhoon Yolanda in November 2013. The figures for April this year include Leyte.

While the number of people employed across the country has increased and those unemployed has dropped, the rate of underemployment shot up, on year-on-year basis, to 18.2 percent from 17.8 percent. And Leyte included the underemployment rate in April was 18.4 percent.


The number of people who were employed in April totaled 39.9 million, underemployed totaled 7.3 million and unemployed 2.6 million.

The government said the marginally higher employment rate indicates an upbeat in the country’s labor market.

Meanwhile, an analyst said that the decline in unemployment could be traced to private sector’s cautious hiring outlook amid the elections season.

Election-related jobs

The National Economic and Development Authority (NEDA) noted that the April employment rate is at the high-end range of previous April rounds of the LFS since 2011 and that election-related activities have partly helped the number of people employed to increase to 39.9 million in April 2016.

Of the employed, the agency noted that more than three-quarters are permanently employed and just over a fifth are short-term or seasonal workers.

Other indicators of quality employment, such as wage and salaried employment (24.8 million or 62.1 percent of total employed), fulltime employment, and mean hours of work have shown an increasing trend, supportive of an optimistic outlook on employment, it added.

Vibrant economy

The latest employment numbers, said the Socioeconomic Planning Secretary Emmanuel Esguerra, “are a reflection of the country’s vibrant economy.”

If the labor market trends are maintained, the Philippine Development Plan target of 6.5 to 6.7 percent for unemployment rate in 2016 is likely to be achieved, he added.

Meanwhile, the vice president and lead economist at the Bank of the Philippines, Emilio Neri Jr., said that he suspects “the higher underemployment numbers resulted from the private sector becoming a bit cautious prior to the elections, possibly staying on the sidelines before deciding on whether they want to hire more people to expand their businesses.”

Underemployment worsens

According to NEDA, what is more alarming is the economic inactivity of the youth. Youth unemployment rate stood at 14.6 percent—more than twice the 6.1 percent national unemployment rate—in April 2016.

Moreover, the agency noted that some 23.8 percent of the total young working population were neither in school nor in the labor force, implying that 4.7 million young Filipinos are underutilized as their skills are not being honed by education, training or employment.

In terms of participation, the PSA data showed that the Labor Force Participation Rate (LFPR) declined in April at 63.6 percent from 64.6 percent. Excluding Leyte, the LFPR also dropped to 63.7 percent.

Recommendations to next admin

To further improve the employment situation in the country, Esguerra, who is also the NEDA director general, said the incoming administration needs to create the conditions that will produce more high quality jobs, including easing the country’s foreign investment restrictions.

Improving the business climate is key, given the need for resiliency and adaptability to changes in the labor market, he said.

Esguerra stressed that the country also needs to focus more on income security rather than job security.

This can be realized by producing a better-trained and agile workforce while also exploring flexible work contracts and unemployment insurance/savings schemes that will support this type of employment.

For this, closer cooperation between industry and educational institutions on curriculum upgrade is crucial, Esguerra said. He also said that farm workers’ access to technology needed to be improved to help them shift to more suitable and high-value crops.

Technology can also be tapped to create crops that can survive adverse weather conditions like La Niña.

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