Job quality improves in October despite increased unemployment

THE LATEST labor data in October bared a mixed picture as unemployment inched up, but the ranks of those wanting more work thinned.

The preliminary report of the October 2018 round of the labor force survey (LFS) conducted by the Philippine Statistics Authority (PSA) and released yesterday put the unemployment rate at 5.1%, equivalent to 2.2 million individuals, compared to five percent in the year-ago survey.

For the year, unemployment rate averaged 5.3%, which is at the upper end of the 4.7-5.3% target set for 2018 under the Philippine Development Plan 2017-2022.

At the same time, the quality of available jobs improved as the underemployment rate — the proportion of those already working but still looking for more work or longer working hours — decreased to 13.3% from 15.9% in the same comparative periods, equivalent to 5.502 million Filipinos, from 6.616 million a year ago.

“This is equivalent to 1.1 million less underemployed workers from last year’s 6.6 million. This is the lowest underemployment rate recorded for all October rounds since 2006 (20.3%),” the National Economic and Development Authority (NEDA) said in a statement. “This signals that the quality of work is improving even outside the

National Capital Region (NCR). We attributed this to expanding employment opportunities and the approval of nominal increases in regional wages supported by labor productivity improvements,” Socioeconomic Planning Secretary Ernesto M. Pernia was quoted in the NEDA statement as saying.

Underemployment rate in areas outside NCR “significantly declined” to 14.6% in October 2018 from last year’s 17%, which is also the lowest in over a decade, NEDA’s statement further read.

Underemployment in the NCR improved to 4.8% in October 2018 versus last year’s 8.6%.

Furthermore, the percentage of “discouraged job seekers” declined to 11.5%, which is better than the 12% target for 2018.

“However, of the total youth population, 19.9% is neither in employment nor in education in 2018, but still falling within the PDP target of 19.5-21.5%,” noted NEDA.

The size of the labor force was approximately 43.563 million out of 71.886 million Filipinos at least 15 years old, yielding a participation rate of 60.6%, down from 62.1% a year ago.

NEDA also noted that around 826,000 new jobs were generated in 2018, less than the government’s annual target of 900,0001.1 million.

“This slightly higher [unemployment] and lower labor participation may actually point to declines in both agriculture and services sectors,” said Ruben Carlo O. Asuncion, chief economist at the Union Bank of the Philippines, Inc. (UnionBank).

Employment share of agriculture and services fell to 24.1% (from 25%) and 56.8% (from 57%). On the other hand, industry saw its share of employment go up to 19.1% from 18% previously.

Much of the increased underemployment rate was seen in agriculture, with a 37.9% rate in October that was worse than last year’s 32.6%. Underemployment in industry and services improved to 18.8% and 43.2% from 19.5% and 47.9%, respectively.