Jobless rate rises to 3-month high

The Philippine unemployment rate climbed to a three-month high in April, while the quality of jobs deteriorated, the Philippine Statistics Authority (PSA) reported on Thursday.

Preliminary data of the PSA’s latest Labor Force Survey (LFS) showed national unemployment rate — the share of the jobless Filipinos to the total labor force — inched up to 4% in April from 3.9% in March but lower than 4.5% a year ago.

April saw the highest unemployment rate in three months or since 4.5% in January.

This translated to 2.04 million unemployed Filipinos in April, up by 41,000 from March. It was 215,000 lower than the 2.26 million jobless a year ago.

For the first four months, the unemployment rate averaged 4%, lower than  4.7% in the same period a year ago.

PSA Undersecretary and National Statistician Claire Dennis S. Mapa said El Niño was the main culprit for the rise in the unemployment rate, especially in the agriculture sector.

“We saw that the crop production in the first quarter declined due to the impact of El Niño. Because the production was lower, you have that decrease in (the number of) employed,” Mr. Mapa said in a mix of English and Filipino during the briefing.

The agriculture sector is the second-largest employer in the country and contributes over a tenth to the economy.

“The slight increase in the unemployment rate, along with the sharp rise in the underemployment rate, reflects economic and seasonal fluctuations, sector-specific downturns, and possible structural changes within the economy,” Security Bank Corp. Chief Economist Robert Dan J. Roces said in a Viber message.

Mr. Roces said the impact of El Niño has reduced labor demand in the agricultural sector, which will eventually affect related industries such as food processing and distribution.

At the same time, job quality deteriorated in April as the underemployment rate went up to 14.6% from 11% in March and 12.9% in April 2023.

PSA data showed the April underemployment rate was the highest in nine months or since the 15.9% recorded in July 2023.

The ranks of underemployed Filipinos — those who want longer work hours or an additional job — rose to 7.04 million in April, up by 1.65 million from March.

Year to date, the average underemployment rate was 13%.

“The rise in underemployment may be attributed to certain subsectors, namely wholesale and retail trade, agriculture and forestry and accommodation and food service activities,” PSA’s Mr. Mapa said.

The employment rate, on the other hand, dipped to 96% in April from 96.1% in March but still an improvement from 95.5% in April last year.

This was equivalent to 48.36 million employed Filipinos in April, a decrease of 798,000 from 49.15 million employed individuals in the prior month.

Year on year, 297,000 Filipinos gained employment.

The employment rate averaged 96% in the first four months compared with 95.3% a year earlier.

PSA data also showed that 50.40 million people were part of the labor force in April 2024. The labor force size fell by 757,000 month on month but grew by 82,000 from 50.31 million in April 2023.

As a result, the labor force participation rate (LFPR) — the proportion of the working-age population (15 years old and over) that is part of the total labor force — slipped to 64.1 % in April, lower than 65.3% in March and 65.1% a year ago.

Year to date, the average LFPR was 63.8%.

“The government aims to assist Filipino workers in the digital age. Initiatives include reducing job search duration, upskilling the workforce, and facilitating the transition towards higher-income jobs,” he said.

By sector, services remained the top employer in April with an employment rate of 61.4%, followed by agriculture with 20.3% and industry with 18.3%.

In April, agriculture and forestry saw jobs fall by 684,000 to 8.35 million, the biggest monthly loss among sectors. It was followed by wholesale and retail trade (down 602,000 down to 10.14 million) and public administration and defense (down 466,000 to 2.82 million).

Meanwhile, month-on-month job gains were recorded in fishing and aquaculture (up 413,000 to 1.44 million), transportation and storage (up 192,000 to 3.75 million), and accommodation and food service activities (up 192,000 to 2.75 million).

On an annual basis, agriculture and forestry shed the most workers at 818,000, followed by wholesale and retail trade (down 587,000) and human health and social work activities (down 85,000).

On the other hand, accommodation and food service activities posted the biggest yearly job gains in April, adding 638,000 workers. Construction saw an increase of 378,000 workers while transportation and storage were up by 289,000.

Wage and salary workers still had the largest share of the labor force at 63.6% in April.

The average Filipino employee worked for 40.5 hours a week in April, slipping from 40.7 hours in March but still more than the 36.9 hours in April last year.

Makoto Tsuchiya, an economist at Oxford Economics, expects the country’s unemployment rate to edge higher and peak at around 4.5% this year amid softening domestic demand and tepid global growth.

Julius H. Cainglet, vice-president for Research, Advocacy and Partnerships at the Federation of Free Workers, said the continued importation of agricultural products has hurt employment in the domestic agricultural sector.

In an e-mail, he said it is critical for key industries and small businesses to receive government support to improve labor conditions and create more decent employment opportunities.

For Mr. Roces, the labor market outlook will depend on several factors such as potential economic recovery, policy interventions, seasonal trends, and the ongoing impact of El Niño.

“While emerging sectors might provide new opportunities, stability will hinge on how these variables play out in the coming months,” Mr. Roces said.

The latest LFS was conducted from April 8 to 20, with 44,890 sample households. — By Abigail Marie P. Yraola, Deputy Research Head