Jobless rate slips to 2-month low

The unemployment rate fell to a two-month low of 3.5% in February, even as more Filipinos joined the labor force, the Philippine Statistics Authority (PSA) reported on Thursday.

Preliminary data from the Philippine Statistics Authority (PSA) showed the unemployment rate in February slipped from 4.5% in January and 4.8% in February 2023.

February’s unemployment rate was the lowest since 3.1% in December last year.

This translated to 1.8 million unemployed Filipinos in February, down by 355,000 from 2.15 million in January and by 679,000 from 2.47 million in February 2023.

Year to date, the unemployment rate dropped to 4% from 4.8% in the same period last year.

PSA Undersecretary and National Statistician Claire Dennis S. Mapa said the opening of classes in February helped boost jobs, particularly in the retail trade.

“The main source of employment gains [in February] was wholesale and retail trade but more on the retail trade due to the opening of classes. That’s one big contributor. Another source is agriculture. We had employment opportunities because of the harvest season,” he said in mixed English and Filipino during the press conference.

In February, the employment rate inched up to 96.5% from 95.5% in January and 95.2% in February last year.

This was equivalent to 48.95 million employed Filipinos, higher than the 45.94 million in January and 48.8 million in February 2023.

For the first two months of the year, the employment rate averaged 96%, picking up from the 95.2% recorded in the same period a year ago.

The job quality in February improved as the underemployment rate went down to 12.4% from 13.9% in January. This was also lower than the 12.9% recorded a year ago, and the lowest in two months or since the 11.9% in December 2023.

The ranks of underemployed Filipinos — employed persons who want more hours of work or an additional job — fell by 318,000 month on month to 6.08 million in February.

On an annual basis, the number of underemployed Filipinos declined by 210,000 from 6.29 million in February last year.

Year to date, underemployment inched down to 13.2% from 13.5% in the same period last year.

The country’s labor force reached 50.75 million in February, increasing by 2.65 million from 48.09 million in January.

On an annual basis, the labor force slipped by 526,000 from 51.27 million in February last year.

This translated to a labor force participation rate (LFPR) of 64.8%, higher than the 61.1% in January but lower than the 66.6% in February last year.

Average LFPR in the January-to-February period reached 63%, lower than the 65.5% last year.

The average Filipino employee worked for 40.1 hours a week in February, down from 42.1 hours the previous month and higher than the 39.5 hours in February 2023.

Robert Dan J. Roces, chief economist at Security Bank Corp., attributed the easing unemployment rate to the “expanding economy, which has created more job opportunities.”

“There might also be a shift towards jobs with more guaranteed hours or full-time positions, leading to a decrease in underemployment (currently at 12.4%),” he said in an e-mail.

PSA data showed wholesale and retail trade gained the most jobs on a monthly basis in February after adding 1.61 million, bringing the number of workers to 10.66 million.

There was a 1.03 million month-on-month increase in workers in agriculture and forestry to 9.36 million, while workers in accommodation and food service activities increased by 325,000 to 2.45 million.

On the other hand, the biggest monthly job losses were seen in fishing and aquaculture (down 402,000 to 1.09 million); followed by information and communication (down 137,000 to 370,000); and professional, scientific and technical activities (down 82,000 to 405,000).

ANNUAL DECLINE
“However, it’s important to consider a caveat. While the overall rate was lower, the year-on-year growth particularly in sectors like agriculture and retail trade were down, offset by construction and hotel and accommodation sectors,” Mr. Roces said.

On a year-on-year basis, construction added the most with 470,000 workers to 4.77 million in February. It was followed by transportation and storage (up 444,000 to 3.85 million) and administrative and support service activities (up 344,000 to 2.52 million).

“The construction sector will likely continue to be supported by the government’s infrastructure program. On the other hand, demand prospects for private construction will hinge on inflation and interest rates coming down. A key risk would be the possible emergence of La Niña or above-average rainfall this year as it would disrupt construction activities,” China Banking Corp. (China Bank) economists said in a note.

However, agriculture and forestry recorded the largest annual job losses that month after shedding 834,000 workers to 9.36 million. It was followed by fishing and aquaculture (down 490,000 to 1.09 million) and public administration and defense (down 418,000 to 2.68 million).

“Adverse weather conditions still cloud the outlook for the (agriculture and fishing) sectors, with the impact of El Niño expected to linger until May and La Niña potentially developing this year,” China Bank economists said.

Despite the improvement in jobs data, Sentro ng mga Nagkakaisa at Progresibong Manggagawa Secretary-General Josua T. Mata said that a huge chunk of the jobs generated are in the informal economy.

“This is where you find a huge decent-work deficit as most workers don’t have social protection,” Mr. Mata said in a Viber message.

The employment share of the wage and salary workers decreased to 62.9% in February from 67.1% in January, while self-employed without any paid employee workers increased to 27.2% from 25.7% the previous month.

Looking forward, China Bank economists said the jobs market is expected to continue its robust performance, although inflationary pressures such as high oil prices and possible wage hikes could weaken labor demand.

“Looking ahead, the future trend in unemployment and underemployment will depend on the ability of the economy to create more jobs and keep unemployment low amidst a high inflation and interest rate environment,” Mr. Roces said. — Karis Kasarinlan Paolo D. Mendoza