By Cai Ordinario, September 9, 2022; Business Mirror
DESPITE the low unemployment rate, local economists said the figures failed to impress as underemployment increased in July and manufacturing, where decent jobs can be generated, saw a decline in employment generation.
On Thursday, the Philippine Statistics Authority (PSA) said the country’s unemployment rate slowed to 5.2 percent in July, the slowest since October 2019 when the jobless rate was at 4.5 percent. The National Economic and Development Authority (Neda) also said this was the lowest unemployment rate for all July rounds of the Labor Force Survey since 2005. (Full story: https://businessmirror.com.ph/2022/09/08/phls-july-unemployment-rate-at-5-2-lowest-since-prepandemic-levels/)
Based on PSA data, the number of underemployed Filipinos reached 6.54 million, a 2.23-million decline from the 8.77 million in July 2021, but an increase of 144,000 compared to the 6.4 million recorded in April 2022 and 655,000 more than the 5.88 million in June 2022.
“A lot of the jobs seem to be generated in the informal sector as underemployment is up by 1.2 percentage points. July is also harvesting season so jobs are expected to be plentiful during this month,” Ateneo Eagle Watch Senior Fellow Leonardo A. Lanzona Jr. told the BusinessMirror.
“My sense is that people were willing to work—which led to the higher labor force participation rate—and were amenable to do so even at low compensation—which resulted in the high underemployment,” he added.
De La Salle University economist Maria Ella Oplas said that while the employment data show good signs
that the economy is recovering, underemployment seems to be on the rise in July. But, she said, the increase in underemployment may be due to the decline in unemployment.
“Underemployment is declining but seems to start increasing again in July. The increase in underemployment seems to have come from the decline in unemployment, which is good. We prefer underemployment over unemployment,” Oplas said. “At least they became employed.”
Sectors and sustainability
PSA data showed the major industries posting the largest drop in employment on a quarter-on-quarter comparison were manufacturing which shed 163,000 jobs; education, 62,00 jobs; human health and social work activities, 24,000 jobs; mining and quarrying, 9,700 jobs; and information and communication, 7,900 jobs.
On a year-on-year basis, the industries that shed the most jobs were professional, scientific and technical activities which lost 93,000 jobs; information and communication, 54,000 jobs; manufacturing, 34,000 jobs; water supply, sewerage, waste management and remediation activities, 11,000 jobs; and mining and quarrying, 9,700 jobs.
Meanwhile, the top industries that created the most employment opportunities for Filipinos in July compared to April were wholesale and retail trade which added 840,000 jobs; agriculture and forestry, 268,000 jobs; accommodation and food services activities, 170,000 jobs; administrative and support service activities, 137,000 jobs; and construction, 137,000 jobs.
On an annual basis, the top industries that employed more Filipinos in July were wholesale and retail trade which added 2.14 million jobs; agriculture and forestry, 1.75 million jobs; accommodation and food services activities, 498,000 jobs; other service activities such as computer repair, etc. 354,000 jobs; and public administration and defense, 206,000 jobs.
“It is too early to say that the push for self-sufficiency is driving this employment growth,” Lanzona said. “The high inflation and the continued depreciation (did) not affect the employment data because low-quality jobs were within their reach and acceptable to them as a means of coping.”
However, former dean of the University of the Philippines School of Economics Ramon L. Clarete told BusinessMirror there are signs that the favorable numbers could be sustained.
Clarete said he expects global trade and growth to start recovering toward the end of the year, and the fact that Covid-19 has not “shown its ugly head” means the pandemic would not dampen global growth prospects.
Nonetheless, he said it will take more than a policy on self-sufficiency to sustain jobs in agriculture. Clarete noted that jobs and growth in the agriculture sector will be driven by affordable food prices.
“Self sufficiency at affordable food prices to consumers can only be sustained with an important role given to the private sector market players. Shifting back to increased public sector role in imports, say by NFA [National Food Authority] is key to higher and unstable prices of food.”
Oplas, for her part, remains optimistic that the reopening of the economy can sustain the favorable jobs data. She noted that apart from face-to-face schooling, more Filipinos are confident to spend time in and part with their cash in malls which have started filling up.
Some hotels, she said, have also started operating again after a pandemic hiatus. In agriculture, Oplas said, the recovery of the economy may make it difficult to fill in some agriculture jobs, especially in provinces.
“The opening up of the Philippines has encouraged people to go to the urban areas for better job opportunities and welfare,” Oplas said.
Government take
Socioeconomic Planning Secretary Arsenio M. Balisacan noted that the labor force participation rate increased to 65.2 percent, with over 5.1 million individuals joining the labor force in July 2022.
He added that the total number of employed individuals rose to 47.4 million, bringing the employment rate to 94.8 percent—the highest recorded since the start of the pandemic. This, Balisacan said, bodes well for the economy.
“We expect more jobs and income opportunities available for Filipinos in the coming months as we move toward the full reopening of the economy. These opportunities will help temper the impact of global inflationary pressures on the purchasing power of Filipinos,” Balisacan said.
“The continuous reopening of schools is a pivotal step for all economic players. The latest data show that as more youth have opted to return to face-to-face classes, women were also relieved from additional care work at home, allowing for more possibilities for them to be economically active,” he added.
The majority of the increase in employment came from the services sector, particularly in wholesale and retail trade. This is followed by the agriculture and industry sectors.
“We need to intensify the vaccination program by increasing the country’s booster rate to sustain low alert levels and reinvigorate domestic economic activity,” the Neda chief added.
Balisacan also highlighted the need for the timely implementation of the Fiscal Year (FY) 2022 national budget and the passage of the FY 2023 budget to accelerate recovery and jumpstart priority programs in the medium term, thus, mitigating the impact of external risks to the economy.