Jobless rate rises on agri, services cuts

MANILA, Philippines — Unemployment rose slightly in July as more jobs were shed in the agriculture and services sectors, the National Economic and Development Authority (NEDA) said.

The country’s jobless rate inched up to 5.6 percent in July from 5.4 percent in July 2016, which means 2.4 million Filipinos are unemployed. The employment rate thus fell to 94.4 percent from 94.6 percent in 2016.

Despite the rise in the number of unemployed, the underemployment rate dropped to 16.3 percent in 2017 from 17.3 percent in July 2016.

Socioeconomic Planning Secretary Ernesto Pernia said the job cuts were due to the “significant” job losses in the agriculture and service sectors.

“The manufacturing and construction sectors have recorded job growth. But the widespread employment losses in the agriculture and services more than offset these gains,” he said, noting the farm sector alone shed 1.03 million jobs.

In the services sector, companies watched closely for contractual labor practices terminated jobs and slowed down on hiring.

“The recent changes in labor policies regarding contractual workers may have had a perverse effect on firms’ hiring decision,” Pernia said.

The country actually had a larger pool of working age population of 15 years and above in July – 79.16 million compared with 68.43 million in  July 2016 – but has a lower labor force participation rate of 60.6 percent in July from 63.3 percent in July 2016. NEDA attributed this to the decline in female labor force participation rate to 45.5 percent during the period from 49 percent a year ago.

Pernia said more jobs are expected to be created as firms adjust to the new regulations imposed by the government on contractualization

“Some companies have not yet adjusted to the new rules on contractualization,” he told reporters. He was referring to the new regulations issued this year, stipulating stricter rules on employing workers on a contractual basis.

The government, he said, would implement labor reforms pursuant to the country’s medium term development plan which seeks to provide more opportunities in underserved and underdeveloped areas.

“The government is concerned over loss in employment and vows to improve the situation. For one, the Build Build Build program, anchored on the PDP, is expected to open the roads for more jobs and generate significant activity in the domestic economy,” Pernia said.

The timely implementation of the government’s aggressive infrastructure development program, particularly with the 75 flagship projects, is expected to create 1.1 million new jobs annually.

One way to enhance the impact of the heavy infrastructure spending on the labor market, Pernia said, is by tapping the domestic economy’s technical and blue-collared workers for the government’s infrastructure projects and programs.