Employment Up, Unemployment Down in July 2018

The country’s labor force continued to grow, recording increased employment and lower unemployment in July 2018, the National Economic and Development Authority said.

The Labor Force Survey (LFS) of the Philippine Statistics Authority showed that employment rate rose to 94.6 percent in July 2018, from 94.4 percent in July 2017.

This is the highest among previous July rounds in the last ten years and similar to July 2016, with an estimated net generated employment of 488,000, and reaching total employment of 40.7 million.

Meanwhile, unemployment rate for July 2018 decreased to 5.4 percent from 5.6 percent in the previous year. This is one of the lowest unemployment rates recorded for all surveys conducted in the July rounds since 2008.

“An average of 1.17 million additional employment has been created so far in the first three rounds of the Labor Force Survey. And this puts the government on track in meeting its target of 900,000-1.1 million employment generation for 2018. With remarkable improvements, the government should not let up on its efforts to continually improve the employment situation in the country,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

The services sector accounted for more than half of the country’s total employment, contributing additional employment of more than 1.1 million.

The industry sector also recorded positive employment growth of 2.2 percent, or 172, 000 additional employment. Among industry sub sectors, the manufacturing sector contributed the largest during the period.

Moreover, the shares of industry and manufacturing to total employment of 19.4 percent and 9.0 percent, respectively, are the highest in a decade. This is consistent with the strong expansion plans of manufacturing firms as a result of a more positive employment outlook for the period.

However, youth unemployment remains relatively high at 14.1 percent.

“The share of inactive youth remains a concern. The government must equip students with industry-relevant competencies as well as increase their opportunities for work experience. A stronger academe-industry linkage should orient students better on career prospects,” the Cabinet official said.

Meanwhile, underemployment—or full-time workers who seek additional hours of work— increased to 17.2 percent or an estimated 7.0 million workers in July 2018. This is higher compared to the 16.3 percent or about 6.5 million underemployed workers in July 2017.

“In order to meet our employment targets, government should provide an environment that is conducive to creating more and better jobs. It should prioritize policies and programs that address the issues of unutilized youth, unemployed youth, underemployment, and vulnerable workers,” Pernia said.

The Cabinet official said that poor low-skilled workers must be provided access to education and skills development programs that will provide lifelong learning opportunities, and that will respond to the changing needs of the labor market, especially in the context of disruptive technologies. He also pushed for the reform of labor laws to provide better social protection to workers, while also improving labor market flexibility to maintain competitiveness and create more jobs.

“This package of reforms should include unemployment insurance as an additional safety net and important complement to labor market flexibility,” Pernia said. “In other words, we need to keep the labor market agile such that more workers and employers can take better advantage of growth opportunities, while still looking after our workers’ welfare,” he added.

The LFS is a nationwide quarterly survey of households to gather data on the demographic and socio-economic characteristics of the population, and provide statistics on trends of employment, unemployment, and underemployment in the country. (NEDA)