PHL unemployment rate hits 4-month low in April, but job quality declines

By Bernadette Therese M. Gadon, Researcher

The country’s unemployment rate fell to its lowest in four months in April, but the quality of jobs slightly deteriorated, the Philippine Statistics Authority reported on Friday.

The unemployment rate fell to 4.5% in April from 4.7% in March and 5.7% in April of last year, according to preliminary April Labor Force Survey (LFS) data.

This equated to 2.26 million jobless Filipinos in April, a 160,000 decrease from 2.42 million in March and a more than half a million decrease from 2.76 million in April 2022.

This was also the lowest unemployment rate in four months or since the 4.3% in December 2022.

Year to date, the statistics authority reported the unemployment rate average at 4.7%, down from the 5.4% average in 2022, and 7.8% in 2021.

Meanwhile, the employment rate in April went up to 95.5% from 95.3% in March, and 94.3% in the same month a year ago.

Year to date, the statistics authority reported the average unemployment rate at 4.7%, down from the 5.4% average in 2022 and 7.8% in 2021.

Meanwhile, the employment rate in April rose to 95.5% from 95.3% in March and 94.3% in the same month a year ago.

This translated to 48.06 million Filipinos who had jobs in April, a decrease of 523,000 from the 48.58 million in March. However, this figure was higher by 2.43 million compared to the 45.63 million employed persons in April last year.

In a Viber message, Julius H. Cainglet, Vice President of the Federation of Free Workers (FFW), stated that the reopening of the economy following pandemic restrictions led to the reinstatement of previously lost jobs.

“Tourism related jobs such as those in resorts and beaches may have increased due to the willingness of many tourists, local and international, to travel and enjoy the wonders of the country,” he added.

In a phone call interview, Ser Percival K. Peña-Reyes, associate director of the Ateneo de Manila University Center for Economic Research and Development, said that while it could be true, the quality of the jobs that returned remained poor.

It’s the quality… that is the challenge when it comes to economic growth. The implication there is more jobs can be created but wages will remain depressed or stagnant because [they are] low productivity [jobs],” he added.

Mr. Cainglet added that summer-related jobs, such as those in tourism for people going to beaches and resorts, are “largely temporary, part-time, and not fully compensated.” This situation causes workers hired in these types of jobs to not earn enough, further contributing to the underemployment numbers.

Five regions reported a higher unemployment rate in April compared to the national average of 4.5%. These regions were Metro Manila (5.3%), Central Luzon (4.7%), Calabarzon (5.5%), Central Visayas (5.2%), and Northern Mindanao (5.3%).

Analysts said that the higher unemployment rates in these regions were due to their dense population as urban centers, where Filipinos tend to go in search of jobs, as growth centers and heavy industries are located in these regions.

“It means we still lack manufacturing jobs, which are key to industrialization and obtaining decent and productive jobs for our people,” Mr. Cainglet said.

“The quality of jobs will improve with an increase in wages. Filipino workers are doing their utmost, but they are not being adequately compensated. Workers should receive living wages, which, in turn, will increase local spending and provide much-needed support to workers, especially in the informal economy,” he added.

LOW QUALITY JOBS

Underemployment—the proportion of individuals who are already employed but are still seeking additional work or longer working hours—increased to 12.9% in April from 11.2% in March. However, this was slower compared to the 14% underemployment rate recorded last year.

This put 6.20 million underemployed Filipinos in April, up 762,000 from 5.44 million underemployed persons in March. On a annual basis, however, April’s underemployment was down 199,000 from 6.40 million in the same month last year.

The labor force size decreased by 684,000 to 50.31 million in April, from 51 million in March.

The country’s labor force participation rate—the share of labor force to the total population 15 years old and over—stood at 65.1% in April, down from 66% in March but higher than the 63.4% in April 2022.

A Filipino worker worked 36.9 hours a week on average in April, a decrease from 40 hours and 40.1 hours in March and April 2022, respectively.

Services sector remained the largest employer with 61.1% share, up from 59% and 58% in March and April last year.

It was followed by agriculture and industry with 21.9% and 17%, respectively.

Wage and salary workers had the largest share of the labor force at 61.5% in April. Workers in the private establishment made the bulk of this segment with 47.6%.

In an e-mail note, Philippine National Bank (PNB) economist Alvin Joseph A. Arogo said that the 8% year-on-year decrease in work hours could be due to companies reducing overtime work as part of cost-saving measures in a high inflationary environment.

Mr. Peña-Reyes suggested looking at medium to long-term growth prospects to create high-quality jobs.

“Economists have always mentioned this ‘broad-based growth.’ Productivity [in] agriculture sector, industry, construction, because this can create jobs. And the jobs that these can create—especially in manufacturing—is a better quality because there are attended benefits that go with formal work (such as health, paid leaves, sick leaves, insurances, etc.),” he said.

FFW’s Mr. Cainglet said that with new entrants joining the labor force, he expects an increase in unemployment numbers in the coming months.

Analysts also reiterated the need to invest in the labor force to create decent, productive, and sustainable jobs.

“That’s the challenge, we need to have good investment, attract more FDI (foreign direct investment), boost our exports, tourism, and remittances,” Ateneo’s Mr. Peña-Reyes said.

He pointed out that the artificial intelligence (AI) poses a threat to jobs in the country, and emphasized the necessity to invest in upskilling and advancing the value chain. To enhance the quality of Filipino workers, investment, skills, and work are required.

National Economic and Development Authority Secretary Arsenio M. Balisacan said that the government can capitalize on digital technologies and implementation of economic liberalization reforms and other essential legislations to keep the trend of lower unemployment rate going.

“Hence, the complete execution of the Philippine Digital Workforce Competitiveness Act is also vital for equipping the workforce with digital technology skills and fostering innovation,” he said in a statement.

He also reiterated the importance of collaboration among government agencies, training institutions, technology providers and other stakeholders to equip skills on Filipinos and empower the work force.

This round’s LFS was conducted from April 10 to 29, with a total of 44,017 sample households.