October’s 5.6% better than development target
Unemployment has fallen to its lowest in 10 years, the government reported on Thursday, hitting 5.6 percent in October.
“This is also the first time that the unemployment rate dropped below 6.0 percent,” Socieconomic Planning Secretary Arsenio Balisacan said.
“In fact, for the full year 2015, the country did better than the Philippine Development Plan target of 6.6-6.8 percent for unemployment,” he added.
“This is due to faster employment growth in the services and industry sectors.”
A year earlier, the unemployment rate was at 6 percent, although this did not include the island of Leyte that was hit by supertyphoon Yolanda in November 2013.
Again excluding the area for comparison purposes, the country’s latest unemployment rate is 5.7 percent, the Philippine Statistics Authority (PSA) said.
The PSA’s latest Labor Force Survey (LFS) showed lower underemployment and an improvement in the employment rate, the National Economic and Development Authority (NEDA) noted. The underemployment rate fell to 17.6 percent relative to the 18.7 percent a year earlier.
“The largest decline in underemployment was among wage and salary workers who worked in private establishments and those who are self-employed without any paid employee,” Balisacan said.
The number of part-time workers seeking additional hours of work decreased by 7.9 percent.
The employment rate grew by 0.4 percent to 39 million, which was traced to stronger employment growth in both the service and industry sectors. The number of workers in the service sector grew by 2.1 percent, or an additional 440,000 employed; while workers in the industry sector grew by 2.8 percent, or an additional 169,000 employed during the period.
“This positive trend in the labor market is also reinforced by an improvement in the quality of jobs generated, as majority of the labor force found remunerative work and full-time employment,” said Balisacan, who is the NEDA director-general.
Wage and salary workers increased by 573,000. In terms of hours of work, the share of full-time employment to total employment increased to 65.2 percent from 63.7 percent. Meanwhile, part-time employment went down to 34.2 percent from 35.4 percent in October 2014.
“For these to continue, the government must ensure that the gains and efforts to focus on quality employment are further sustained,” Balisacan said.
“We need to sustain public investments in education and training to improve labor productivity and capacities. At the same time, we need to sustain the momentum of fiscal spending, particularly in infrastructure development, to boost economic growth and employment in agriculture and industry sectors,” he added.
As employment growth in the agriculture sector was dampened by weather disturbances, he stressed the importance of the Roadmap for Addressing the Impact of El Niño’s proper implementation.
The latest survey also found the labor force participation rate dipping to 63.4 percent, mainly involving the young working age population or those 15-24 years old.
“The decision among the 15- to 24-year-old population not to look for work during the period could be because they chose to pursue higher education or undergo training, as indicated by the increase in tertiary education enrolment rate, as well as the increase in technical vocational engagements among the youth,” Balisacan said.
Commenting on the LFS data, BPI associate economist Nicholas Antonio Mapa said, “Sustained above trend growth rates in terms of GDP [gross domestic product]have resulted in the gradual whittling down of the unemployed labor force.”
He noted that the distribution of the labor force reflected the economy’s structure, with services – a growth driver – accounting for the largest share of the employed.
With scores of the unemployed mainly in the low-skilled to no-skilled category, he said there was a need to help these workers find jobs.
“Manufacturing comes to mind as the perfect match for the low-skilled workers.
Furthermore, the increased forward and backward linkages for manufacturing, as well as the scale at which it can help bring down the unemployment rate, tell us this is one other sector the next administration needs to help nurture,” he said.