Underemployment Rate Drops to New Record Low in 10 Years

The Philippine labor market continued to record positive gains as underemployment rate fell to its lowest in a decade on top of an increased employment rate, the National Economic and Development Authority (NEDA) said.

The January round of the Labor Force Survey (LFS) of the Philippine Statistics Authority showed that the country’s underemployment rate – the proportion of those already employed but still wanting more work – dropped further to 14.8 percent, from 15.6 percent in January 2019.

This is the lowest underemployment rate recorded for all January rounds in the last 10 years.

“While the results of the latest Labor Force Survey showed remarkable improvements in the Philippine labor market, the government should continually improve its efforts towards providing an environment conducive to the creation of more and better employment opportunities,” Socioeconomic Planning Secretary Ernesto Pernia said.

Notably, the employment rate rose to 94.7 percent, which brings the total number of employed Filipinos to 42.7 million in January 2020.

The employment growth rate is up by 4.0 percent or an estimated 1.6 million additional employment from the same period in 2019. This is on account of stronger employment in agriculture (9.2 percent growth) and services (4.0 percent growth) sectors.

The unemployment rate also remained consistently low, maintaining its 5.3-percent mark from January 2018 up to the present.

Labor force participation improved to 61.7 percent, reflecting confidence in the economy with an improved labor market situation. The labor market attracted 1.7 million labor entrants, which largely came from the younger working-age group (15-24 years old).

The LFS for January 2020 showed a decline in the number of females who opted out of the labor force due to household family duties (131,000 in absolute terms).

NEDA attributed this to the reforms that enabled workplace flexibility (such as the Expanded Maternity Leave Act and the Telecommuting Act), as well as employment facilitation programs and easier access to modern family planning services.

Meanwhile, more women, especially ages 15-24 years old, opted to stay in school, manifesting the effectiveness of various education and skills training programs made available for women to maximize their potential, Pernia said.

“Policies and programs must be in place to address the issues of workers protection, vulnerable employment, and underemployment in areas outside NCR,” the Cabinet official said.

Sustainable livelihood and entrepreneurship for vulnerable workers may also be developed by intensifying advocacy on economic and financial literacy, as well as community-based cooperatives.

“These efforts will further improve the country’s labor market in the short run and assist in the attainment of the long-term vision of the Filipinos such as having their own businesses, as stated in AmBisyon Natin 2040,” Pernia said.

Meanwhile, with the recent Taal volcanic eruption and the latest onset of the coronavirus disease 2019 (Covid-19), government interventions for displaced workers should be in place, as a slowdown in employment and economic activities are inevitable.

“Given the high probability of displaced workers in the services and accommodation sectors, social protection programs and income support systems are necessary to effectively cushion workers against risks,” he added.