Oct unemployment 6% vs 6.7% in Sept, 6.4 yr-earlier
(Updates with official comment, details)
Unemployment in the Philippines dropped in October from July, as well as from a year earlier, but while analysts acknowledged the improvement, they said they would keep watch of the increasing number of underemployed Filipinos in the months ahead.
The unemployment rate eased to 6 percent in October from 6.7 percent in July, when the last periodic survey was conducted, and from 6.4 percent in October 2013. The data came from the preliminary results of the Labor Force Survey (LFS) released by the Philippine Statistics Authority (PSA) on Wednesday.
The PSA figures showed that employment also improved to 94 percent in October from 93.6 percent a year earlier.
Underemployment up at 18.7%
However, the underemployment rate, or the percentage of the underemployed to the total employed, is estimated to have risen to 18.7 percent from 18.0 percent in October 2013.
The PSA considers employed persons who express a desire to have additional hours of work in their present job, or to have an additional source of income, or to have a new job with longer paid working hours, as underemployed.
Employed persons, on the other hand, 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.
“The drop in unemployment is a welcome development but it belies the shift of workers to part-time jobs or jobs that do not fit the skill set of those looking for work,” Nicholas Antonio Mapa, associate economist at the Bank of the Philippine Islands (BPI), said.
Jobs concentration in service sector
Mapa said that the concentration of employment in the services sector may have been the reason for the higher number of underemployed Filipinos for the period.
Based on the PSA data, workers in the services sector remained the largest proportion of the population who are employed. These workers made up 53.7 percent of the total employed in October 2014.
“We can also say that the majority of the jobs remain in the services sector, as it comprises more than 60 percent of the economy. Service sector jobs are not an exact fit for those out of work as they are usually low-skilled to no-skilled in nature,” he said.
“Thus these workers are forced to take part-time work, which can explain the increase in underemployment at the same time the unemployment numbers improve,” he added.
The BPI economist stressed that these workers would be more suited to work in a manufacturing or agricultural job.
Labor force participation up
The latest data excludes results from Leyte province, the agency said.
“In this report, for purposes of comparing with the October 2014 results, the October 2013 labor and employment indicators were computed using the October 2013 LFS data that excludes those for the province of Leyte,” the PSA explained.
The LFS showed that the labor force participation rate (LFPR) increased to 64.3 percent in October 2014 from 63.9 percent a year earlier.
Socioeconomic Planning Secretary Arsenio Balisacan pointed out an improvement in the quality of jobs over the period.
“The improved employment numbers also translated to better quality jobs as around 1.03 million of the total employment generated in October 2014 were considered full time. Consistent with this is the increase in remunerative wage and salary workers, particularly in private establishments,” he said.
Need for investment, income diversification
Balisacan, who is also the National Economic and Development Authority (NEDA) director-general, said broad-based growth in employment provides the government an optimistic outlook on the country’s economic performance in the fourth quarter of 2014.
However, the NEDA chief stressed that the government needs to sustain the implementation of a multidimensional approach to raise investment, particularly in the rural areas, and improve productivity, as well as income per capita in the country.
“It is also important to encourage income diversification and labor mobility in and out of agriculture,” he added.