Unemployment rate eases to 5% in September

MANILA, Philippines — The number of jobless people dipped to its lowest level in nearly three years last month, but the number of employed also dropped as many opted to leave their jobs to go to school, according to the Philippine Statistics Authority (PSA).

At a briefing yesterday, National Statistician Dennis Mapa said preliminary results of the PSA’s Labor Force Survey showed that the unemployment rate was at five percent in September, down from 5.3 percent in August and 8.9 percent in September last year.

Mapa added that the unemployment rate in September is the lowest since October 2019 when the figure was at 4.5 percent.

The latest unemployment rate translates to 2.50 million jobless Filipinos last month, lower than 2.68 million in August and 4.28 million in September last year.

PSA data also showed that the number of employed individuals declined to 47.58 million in September from 47.87 million in August.

The number of employed individuals in September, however, went up compared with 43.59 million in the same month last year.

The country’s employment rate was at 95 percent in September, up from 94.7 percent in August and 91.1 percent in September last year.

It was also the highest recorded employment rate since January 2020.

In explaining the drop in the number of employed and unemployed individuals, Mapa cited the decline in the labor force participation or those with or without a job to 50.08 million individuals in September from 50.55 million in August.

This translated to a labor force participation rate of 65.2 percent in September, down from 66.1 percent in August.

“Many of them went back to school, that’s why there is a decrease in the number,” he said, noting that 41 percent of those who left the labor force cited schooling as their reason.

The national statistician added that many of those who opted out of the labor force are women and part of the 15- to 24-year-old and 25- to 34-year-old age groups.

Posting the biggest month-on-month drop in employment in September was the wholesale and retail trade, and repair of motor vehicles and motorcycles at 335,000.

Many of those who contributed to the decline in employment in the retail sector are self-employed individuals, according to Mapa.

“They are actually food stalls in groceries, supermarkets and even in schools. These showed a decline. There is a possibility, of course; I am just looking at the relationship of prices, maybe the  input costs were too high and it made some of them decide to pull out,” he said.

Other industries with large month-on-month declines in employment in September are administrative and support service activities with 289,000; construction (197,000); agriculture and forestry (120,000) and arts, entertainment and recreation (105,000).

Meanwhile, the number of underemployed or those who want additional hours of work rose to 7.33 million in September from 7.03 million in August and 6.18 million in September last year.

This is equivalent to an underemployment rate of 15.4 percent in September, up from 14.7 percent in August and 14.2 percent in September last year.

The National Economic and Development Authority (NEDA) said the underemployment rate worsened as more than 882,000 individuals looked for additional income to cope with rising commodity prices.

To address underemployment, the government is committed to improving the quality of jobs in the country, according to the NEDA.

“Ensuring food security remains as our top priority. In the immediate term, the government is providing targeted cash transfer as well as fuel and crop subsidies to help protect the purchasing power of Filipinos and reduce the incidence of invisible underemployment among low-income households,” Socioeconomic Planning Secretary Arsenio Balisacan said.

Balisacan cited the importance of having effective emergency employment programs and other forms of assistance for those most affected by calamities.

“As we are expecting La Niña and near- to above-normal rainfall conditions in the coming months, we need to boost our disaster resilience and climate adaptation measures,” he said.

The NEDA emphasized that the timely passage of the 2023 budget and expediting the 2022 budget implementation are crucial to accelerate recovery and mitigate the impact of external risks, particularly on infrastructure projects that contribute to job creation.

“With the Philippine Development Plan 2023-2028 nearing its completion, we aim to strategize for a more efficient labor market by improving the quality of education, providing opportunities for lifelong learning, skills development and options to obtain micro-credentials, enhancing job facilitation programs and strengthening linkages among industry, business and training institutions,” Balisacan said.

With the average unemployment rate in the January-to-September period at 5.8 percent, Mapa said the country is close to the pre-COVID-19 pandemic level of 5.1 percent unemployment rate in 2019.

The average unemployment rate hit 10.4 percent in 2020 at the height of the pandemic and went down to 7.8 percent last year.

For the remaining months of the year, Mapa projected the unemployment rate to be near the five percent level.

He said the high inflation rate, however, may affect demand and the labor market.

Inflation zoomed to 7.7 percent in October, the highest in almost 14 years.

Aside from higher inflation, Rizal Commercial Banking Corp. chief economist Michael Ricafort said other factors that could offset gains in the labor market are the weaker dollar-peso exchange rate that increased import or input costs, rising trend in interest rates or borrowing costs that could affect job-generating investments or expansion projects, narrower profit margins, storm damage as well as the risks of recession in the US and continued implementation of pandemic-induced lockdowns in China.

The upcoming holiday season, however, may have a positive effect on employment.

“Employment data could still improve further in (the fourth quarter of) 2022 in view of the seasonal increase in sales or revenues or business transactions as well as hiring or employment, both seasonal and permanent, during the holiday season toward the end of the year – among the highest, if not the highest, sales or revenues for many businesses or industries that translate to higher sales, net income, employment or jobs and overall valuations for some companies,” Ricafort said.

More jobs

Despite the drop in the country’s unemployment rate, workers feel the need for the government to take action to create more jobs.

For Sentro ng mga Nagkakaisa at Progresibong Manggagawa (SENTRO) secretary general Josua Mata, the economy is not creating enough jobs for Filipinos.

“It is expected that employment figures would improve as we continue to open the economy, but the persistence of high unemployment and underemployment, which stands at 20.4 percent, shows that our economy continues to be inefficient in generating the jobs that we need,” Mata said in reaction to the results of the Labor Force Survey.

He added that the increasing underemployment is an indication of the poor quality of jobs being generated at this time.

“What’s more worrisome is the fact that the youth are the ones being left behind with an unemployment rate of 11.5 percent and underemployment rate of 12.4 percent,” Mata pointed out.

To address the problem, the SENTRO leader called on the government to mount an intensified public employment program and adopt an active agro-industrial policy. – Mayen Jaymalin