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Jobless rate eases in April

PHILIPPINE STAR/ MIGUEL DE GUZMAN

By Bernadette Therese M. Gadon, Researcher

The unemployment rate in April slowed to its lowest since the start of the pandemic as the size of the workforce shrank amid the disruptions caused by the ongoing Russia-Ukraine conflict.

Preliminary results of the Philippine Statistics Authority’s (PSA) April round of the Labor Force Survey (LFS) on Friday showed the unemployment rate slowed slightly to 5.7% from 5.8% in March. This was also slower than the 8.7% jobless rate the year before.

This put the ranks of unemployed Filipinos to 2.762 million in April, down by 112,700 from 2.875 million in March. This was also a decrease by 1.376 million from 4.138 million in April 2021.

It was the lowest unemployment rate since before the pandemic or the 5.3% in January 2020.

The quality of jobs likewise improved as underemployment rate slowed to 14% in April from 15.8% in March and 17.2% in April last year.

This was equivalent to 6.399 million working Filipinos but still looking for more work or longer hours that month. This was lower than the 7.422 million underemployed in March and 7.453 million in April 2021.

The underemployment rate matched February’s share and the lowest since 12.3% in May last year.

However, the size of the labor force declined month on month by 1.457 million to 48.393 million in April. Compared to April last year, the size of workforce went up by 986,600 from 47.407 million.

This translated to labor force participation rate (LFPR) — the share of labor force to the total population 15 years old and over — of 63.4% in April, decreasing from 65.4% in March, but higher than the 63.2% in April last year.

It was the lowest LFPR in three months or since 60.5% in January.

The National Economic and Development Authority (NEDA) said fewer Filipinos participated in the labor force in April due to supply chain disruptions caused by the Russia-Ukraine conflict and seasonal factors in agriculture.

“Higher oil prices and seasonal factors have impacted workers in the transport and agriculture sectors, respectively, and hindered some from going to work,” Socioeconomic Planning Secretary and NEDA Director-General Karl Kendrick T. Chua said.

“To address this, the government will urgently distribute targeted subsidies to the hardest-hit sectors to cushion higher prices,” Mr. Chua said.

“Of the 1.3 million net employment loss, 1.1 million were from agriculture while 0.5 million were from services. This was slightly tempered by 0.3 million employment generated in the industry sector,” the NEDA said in a statement.

Services sector remained the largest employer in April with 58% share. Agriculture and industry accounted for 23.6% and 18.4%, respectively.

“Despite external risks, overall employment remains at 3.1 million above the pre-pandemic level as around 80% of the economy has been placed under alert level 1,” the NEDA said.

The ranks of Filipinos aged 15 to 24 years old looking for work for the first time decreased quarter on quarter to 1.148 million in April, lower by 508,700 from January’s 1.656 million. However, this was higher than the 977,000 a year ago.

The share of the new entrants to the total labor force reached 2.4% in the April, lower than 3.6% in January but higher than 2.1% in April last year.

During the press briefing, National Statistician Claire Dennis S. Mapa said of the total new entrants in April, around 993,000 were hired while 154,000 were unemployed.

The employment rate — the share of the employed to the total workforce — stood at 94.3% in April, lower than 94.2% the previous month but higher than 91.3% last year.

This was around 45.631 employed Filipinos in April, down by 1.344 million from 46.975 million in March, but higher than the 43.269 million employed in April 2021.

A Filipino worker worked on average of 40.1 hours a week in April, slightly lower than 40.6 hours in March but higher than 38 hours a year ago.

University of Asia and the Pacific Senior Economist Cid L. Terosa said the “vibrant” economic landscape this April due to ease in restrictions and election-related activities improved the labor force in April.

“The graduation season usually adds more people to the labor force and increases the actual number of individuals that are available for work,” he said in an e-mail.

Mr. Terosa said the slight improvement in the employment rate indicates that the employment situation is “getting better” post-pandemic.

He also added the slight month-on-month improvement of employment rate in April can be traced partly to inflation pressures due to rising fuel and production input prices.

“The employment rate would have recorded greater MOM (month-on-month) increase if inflation remained within the 2-4% range,” Mr. Terosa said.

Headline inflation climbed to 4.9% in April, breaching the Bangko Sentral ng Pilipinas’ 2-4% target band, as food and fuel costs rose amid the ongoing supply disruption due to Russia’s invasion of Ukraine since late February.

China Banking Corp. Chief Economist Domini S. Velasquez said election and harvest season in agriculture sector contributed to better employment figures in April.

“However, it is concerning that many of the jobs generated since the start of the year are in the agriculture sector, which is very vulnerable to any weather disturbances,” Ms. Velasquez said in an e-mail.

“Important to watch out for in terms of job quality is if the share of wage and salary workers segment is increasing. If so, this will usually imply permanent employment and more secure income for employees.”

OUTLOOK

Analysts are waiting for the incoming administration’s detailed plans in addressing current issues to see how this would affect the employment sector.

Federation of Free Workers President Atty. Sonny Matula said full-time employment and sufficient income are still the key to reducing unemployment rate.

“Three general measures are needed to be carried out by the new administration for this purpose: (1) faster economic growth based on increased investments in key infrastructure and by the private sector; (2) slower inflation; and (3) improved fiscal discipline based on good governance principles,” he said in a Viber message.

Mr. Terosa said that the Marcos administration “will definitely have its hands full” in employment creation as the administration is coming in post-pandemic.

“The new administration has to find ways to create more and better jobs despite the geopolitical tension, oil price increases, and supply chain disruptions,” he said.

Ms. Velasquez said President-elect Ferdinand R. Marcos, Jr.’s commitment to focus on jobs targeting micro, small, and medium enterprise’s’ recovery and by continuing Duterte administration’s infrastructure program “bodes well” for the labor market.

“However, recent minimum wage increases and higher cost of production due to oil prices might squeeze businesses’ working capital and might curtail their expansion plans and adding more workers,” she said.

The Labor department said fresh hikes in daily minimum wage in 14 regions will take effect starting this month.

“Agriculture must remain a priority sector for development and for the purpose of food security. Solid support for farmers, fisherfolks and forestry workers are necessary. This calls for review of existing laws and programs in agriculture to align this to higher and faster economic growth,” Mr. Matula said.

The PSA started reporting monthly jobs data in 2021. Prior to that, the agency published employment figures on a quarterly (January, April, July, and October) basis.

The April round of LFS was conducted from April 8 to 30, covering 43,500 sample households.

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