Angelo Taningco
Economist, Treasury Group

The Philippine unemployment rate fell to 5.7% in April from 6.6% in January and 6.1% in April of last year, while the country’s underemployment rate stood at 16.1% in April, the lowest since January 2005, according to the latest labor market data of the Philippine Statistics Authority released on 9 June.

Figure: Unemployment and Underemployment Rates, Jan. 2010 – Apr. 2017
(percent)

 
The year-on-year (yoy) drop in the unemployment rate was largely due to the number of unemployed persons decreasing by 0.2 million. As of April, unemployed persons totaled 2.4 million of which 50% belongs to the youngest working-age group (15-24 years old); 34% have completed junior high school, 21% are college graduates; and 64% are males. By region, the largest number of unemployed is located in CALABARZON (0.4 million) while Ilocos Region posted the highest unemployment rate (10.4%). Meanwhile, the number of underemployed persons fell 12.9% yoy to 6.5 million in April. By sector, 44% of the underemployed are working in services, 36% in agriculture, and 20% in industry. In terms of working hours, 60% of the underemployed render less than 40 hours in a week and 38% more than 40 hours. By region, Eastern Visayas recorded the highest underemployment rate at 24.0%.

The number of employed persons fell 1.0% yoy to 40.3 million in April. The drop was solely due to a 2.4% yoy employment loss in the services sector-which accounted for majority of the employed at 22.3 million in April-that was partly offset by employment gains of 1.2% yoy and 0.5% yoy in agriculture (10.5 million) and industry (7.4 million), respectively. Meanwhile, the share of wage and salary workers, who comprised majority of the employed, slipped by 0.3 percentage points yoy to 61.3% in April while that for the self-employed rose 1.4 percentage points yoy to 28.2%.

Amid annual declines in the employed and unemployed persons as well as the working-age population rising 2.1% yoy to 69.6 million in April, the labor force participation rate fell by 2.1 percentage points yoy to 61.4% in April.

The National Economic and Development Authority (NEDA) has stated the need for the decline in the unemployment rate to be sustained and job creation to be pursued in order to meet the government’s unemployment rate target of 3%−5% by 2022 as stipulated in the Philippine Development Plan 2017-2022. We believe lowering the unemployment rate to the target level is attainable and we posit that this can be met via strengthening labor demand as well as through fiscal and monetary policies.

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