The unemployment rate in the Philippines eased to 6.7 percent in July from 7.3 percent a year earlier, the government announced on Wednesday.
The figures were based on preliminary results of the Labor Force Survey (LFS) released by the Philippine Statistics Authority (PSA) on Wednesday.
In the last periodic survey conducted in April, unemployment was recorded at 7.0 percent.
The number of employed Filipinos grew by 2.8 percent in July to 38.5 million from 37.4 million in the same period last year.
This means 1.06 million jobs were generated during the period, reflecting continued signs of dynamism in the labor market and sustained confidence in the economy, the agency said.
“Employment generation during the period was broad-based, led by services and industry,” Balisacan said.
The government noted, however, that data from the province of Leyte hard-hit by Typhoon Yolanda in November 2013 was still excluded from
the preliminary results of the Labor Force Survey (LFS) released by the Philippine Statistics Authority (PSA) on Wednesday.
In a statement, the National Economic and Development Authority (NEDA) explained that the calculation of the July 2014 round of the survey still excluded data from the province of Leyte as no survey was conducted in the area because of the destruction and labor displacement caused by Typhoon Yolanda.
“To be comparable, the Philippine Statistics Authority also excluded the labor and employment data of the said province in the July 2013 LFS round,” Socioeconomic Planning Secretary and NEDA director-general Arsenio Balisacan said.
Apart from that modification, the NEDA noted that all the indicators in the survey, employment, unemployment, underemployment, and the labor force participation rate, all improved during the period.
Employed persons are classified as either full-time workers or part-time workers. Full-time workers are those who work for 40 hours or more per week while part-time workers work for less than 40 hours per week.
Underemployment, which is defined by the number of workers who already have jobs but are seeking additional work, went down to 18.3 percent in July 2014 from 19.2 percent in the same period last year.
The LFS also showed that the labor force participation rate (LFPR) also increased to 64.4 percent in July 2014 compared to 63.9 percent a year ago. This represents 879,000 labor entrants, expanding the labor force to 41.23 million.
“To some extent, the growth in the LFPR reflects the more positive outlook of workers in line with the momentum created by the robust economic growth in recent years, along with the expectations of better employment,” the NEDA chief stated.
Balisacan added that employment expanded in each class of workers as the majority of labor found remunerative work. However, in services and agriculture, which account for the bulk of the country’s labor force, the employment generated was mostly in part-time work.
“This dampened overall mean hours of work,” he said.
The NEDA director-general stressed that the government should continue fostering an economic climate conducive to business and investment to sustain the labor market gains it has achieved in recent quarters.
In industry, he said the key objective should be to increase investment, especially in labor-intensive sectors, and to encourage the existing pool of employers to hire more workers.
In the immediate term, the demand for labor can be driven by the infrastructure program of government, reconstruction activities in the Visayas and other disaster-hit areas, and private construction, Balisacan added, pointing out that there is also room for expansion in business-process management and tourism-related activities.
In agriculture, the NEDA chief said problems are primarily related to the quality of employment, which is both seasonal and low-paying. This can be addressed by introducing nonfarm employment opportunities during the off-season, Balisacan explained.
“To further support the labor market performance in the medium term, the government should remain vigilant to attendant risks to growth and make sure that pre-emptive measures and programs are in place to mitigate any adverse effects of such risks or shocks in the economy,” he concluded.
Sharing the same view, Alvin Ang, economist at the University of Santo Tomas said the latest data shows an improving jobs picture in the Philippines.
Despite this, he said that there are still challenges that need to be addressed to sustain the improvement in the jobs situation in the country.
“There are still challenges in underemployment especially in the industry sector,” he said.
Ang recommended that the coordination of government activities must continue to improve to lower the cost of putting up new business in the country, which in turn generates more jobs for the people.