Philippine Labor Force Situation

THE COUNTRY’S unemployment rate dropped to another record low in November, as businesses ramped up hiring ahead of the holiday season, the Philippine Statistics Authority (PSA) said on Tuesday.

Preliminary results of the PSA’s Labor Force Survey (LFS) showed the unemployment rate fell to 3.6% in November from 4.2% in the previous month and in November 2022.   

November’s jobless rate was the lowest record since the PSA revised the definition of “unemployed” in April 2005 to refer to people aged 15 years and older without a job and are available for work and actively seeking one.

The number of unemployed Filipinos decreased by 12.3% or 257,000 to 1.83 million in November from 2.09 million in October. It was also 15.8% or 343,000 lower than the 2.18 million jobless Filipinos in November 2022.

For the first 11 months of 2023, the unemployment rate stood at 4.5%, well below the 5.3%-6.4% target under the Philippine Development Plan.

“We noticed there are more employed persons (in November) at 49.64 million compared to October’s 47.8 million. In terms of numbers, this is a significant increase month on month. Of course, we saw this not just in November but during the fourth quarter because of the holidays,” PSA Undersecretary and National Statistician Claire Dennis S. Mapa said in Filipino during a briefing. 

The underemployment rate — the share of those already working but still looking for more work or longer working hours to total employed population — remained at 11.7% for a second straight month in November. Year on year, it was lower than the 14.4% in November 2022.

This translated to 5.79 million Filipinos looking for additional jobs or longer working hours, 188,000 more than October’s 5.6 million. On a yearly basis, this was lower by 1.37 million from 7.16 million underemployed Filipino workers.

Year on year, the underemployment rate averaged 12.4%, lower than 14.4% in 2022.

PSA data showed the labor force participation rate (LFPR) — the proportion of the total labor force in the working-age population of 15 years old and over — increased to 65.9% from 63.9% in October and was the highest since 66.1% in June 2023.

Month on month, the size of the labor force grew by 1.58 million to 51.47 million.

Year on year, the LFPR was lower than 67.5% in the same month in 2022. The size of the labor force in November decreased by 413,000 from last year’s 51.88 million.

“The (annual) decline was mainly due to reduced participation of young people (34.4% from 40%) and women (55.4 % from 57.8%) in the labor force, influenced by family responsibilities, schooling, and age-related factors,” the National Economic and Development Authority (NEDA) said in a statement.

For the first 11 months, the LFPR averaged 64.8% from 64.5% in the same period a year ago.

NEDA Secretary Arsenio M. Balisacan said expanding the digital economy, particularly micro, small, and medium enterprises, would help address the year-on-year drop in the labor force and boost jobs this year.

“Digitalization enables alternative work arrangements, particularly for the youth, women, and those in the creative sector. This will help address the declining labor force,” he said in a statement.

The employment rate — the share of the employed Filipinos to the total working force — rose to 96.4% in November from 95.8% in October and November 2022.

Mr. Mapa said the employment rate was also the highest since April 2005.

The number of employed people stood at 49.64 million in November, up by 1.83 million from October’s 47.8 million and by around 70,000 from 49.7 million in November 2022.

From January to November, the employment rate averaged 95.5%, slightly up from 94.5% a year ago.

“We will take full advantage of the liberalization reforms intended to attract investments in the Philippines, especially in digital infrastructure. Upgrading our infrastructure will attract investments that generate high-quality jobs,” Mr. Balisacan said.

The services sector remained the top employer in November with an employment rate of 59.5% of the total population, followed by agriculture and industry at 24.6% and 15.9%, respectively.

Year on year, higher employment was seen in agriculture and forestry with a 1.24 million increase. This was followed by construction (up by 453,000), and transportation and storage (308,000).

“Agricultural employment is extremely variable because of the seasonality of work and because it is still the sector of last resort for so many Filipino jobseekers,” Sonny A. Africa, executive director of think tank Ibon Foundation said in a Viber message.

Meanwhile, the manufacturing sector recorded the highest year-on-year job losses at 1.39 million in November.

“Brisk economic activities continued to drive down the country’s unemployment rate. This is partially helped by seasonal factors but still below 2022’s comparable figure,” China Banking Corp. Chief Economist Domini S. Velasquez said in an e-mail.

On average, an employed Filipino worked 40.2 hours, down from October’s 41.2 average hours but higher compared with 39.3 hours in November 2022.

Philippine Institute for Development Studies Senior Research Fellow Roehlano M. Briones expects the labor market to continue to improve.

“I don’t expect it to go down much further, [as] it is already approaching the natural rate of unemployment. [It] cannot be attributed only to seasonality because the rate was higher 12 months ago,” Mr. Briones said in a Viber message.

Ms. Velasquez also sees higher employment opportunities from the services sector amid slowing inflation.

“The industry sector will likely be a mix of improving construction outlook and moderating manufacturing activities,” she added. — Mariedel Irish U. Catilogo

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