MANILA - The Philippine unemployment rate hit 8.7 percent in January, the third-highest jobless rate in the Philippines since April 2005. This was equivalent to 4 million jobless Filipinos.

This was also the highest unemployment rate for all January rounds since the Philippine Statistics Authority adopted a new definition for employment in 2005.

The PSA noted that while the jobs data has improved, including labor participation and employment, the gains would likely be derailed by any form of quarantine tightening.

More Filipinos are finding work, in step with the easing of quarantine restrictions, and the resumption of economic activity. But the level of unemployment in the Philippines is still historically elevated, and more employees are indicating they are unhappy with their current earnings.

The jobless rate in January this year is higher than the 5.3 percent unemployment rate in January 2020. Year-on-year, the number of unemployed rose by 1.6 million.

While January’s 8.7 percent jobless rate is the same as October last year, the number of unemployed rose by around 100,000 from the last quarter.

Part of the reason for this was the increase in labor force participation, meaning more Filipinos joined the workforce hoping to find jobs. Year-on-year, 300,000 more Filipinos braved the job market. Quarter-on-quarter 1.6 million Filipinos went out to look for work.

The labor force participation rate in January was better compared to the lows seen in April and October 2020. The Philippine Statistics Authority however said it was still the 5th worst participation rate since April 2005, when the Philippine government adopted the current definitions for employed and unemployed persons.

The number of employed increased by 1.4M quarter-on-quarter, but it is still down 1.3M year-on-year.

All of this added up to the third-highest unemployment rate recorded since 2005. It was also the worst unemployment rate for all January rounds since that year.

Unemployment, shown by the blue line, has improved, but it is still elevated compared to pre-pandemic levels. Underemployment, shown by the orange line, has also improved, but it appears to be on a steeper trajectory, indicating that more Filipinos in the workforce are looking for better paying opportunities.

CALABARZON or Region 4-A had the highest unemployment rate in the Philippines in January at 13.1 percent.

The Bicol Region had the second highest unemployment rate at 11.3 percent. The National Capital Region, and MIMAROPA or Region 4-B both had unemployment rates above the national average of 8.7 percent.

CALABARZON, MIMAROPA, and the Bicol Region all saw their unemployment rates increase quarter-on-quarter. The NCR’s joblessness rate improved compared to October levels.

The Philippines’ economic hubs are all still suffering from high unemployment.

The services sector remained the main source of employment in the Philippines, accounting for 57.2 percent of the total jobs. This is equivalent to 23.6 million Filipinos, lower than the 24.9 million total in January 2020.

Agriculture came in second with 24.4 percent of the total. The farm sector employed 10 million Filipinos in January, from 9.8 million in October, and 9.6 million in January 2020.

It appears more Filipinos are finding work in agriculture. This might have been helped along by some government programs, including the Balik Probinsya Bagong Pagasa program of the Duterte administration where displaced workers in Metro Manila were encouraged to return to their provincial roots through transport subsidies and cash assistance.

Industry accounted for 18.4 percent of total employment in January, providing jobs for 7.6 million Filipinos.

Information & Communication, and Human Health and Social Work activities saw the biggest spikes in employment for the period based on year-on-year comparisons. Over 90 thousand more jobs were created in the Information and Communication sector. Nearly 70 thousand jobs were created in Human Health and Social Work. Another 89 thousand jobs were created year-on-year in Education as new opportunities in online learning opened up.

Quarter-on-quarter data show arts, entertainment, and recreation had the biggest improvement with a 25.7 percent jump, with 55 thousand more jobs created. This was clearly the result of the reopening of the Philippine economy, particularly the tourism industry.

Even absenteeism due to COVID-19 lockdowns is down, with bad weather and natural disasters taking the top spot in the survey on reasons for being employed but not at work.

Finance Secretary Carlos Dominguez, Acting Socioeconomic Planning Secretary Karl Chua, and Budget Secretary Wendel Avisado issued a joint statement on the jobs data, taking it as an opportunity to highlight the gains from reopening the economy and easing quarantine restrictions.

"While the data show that across sectors, we are gradually getting back the jobs we lost due to the pandemic, the smaller progress in the past quarter suggests that we still need to address the remaining restrictions before the economy can get closer to normal,” the government’s economic managers said in a statement.

Plans to further reopen the economy however are under threat, as fresh COVID-19 cases surge anew. Over 3,000 new COVID-19 cases have been reported everyday for several days now.

National Statistician, Usec Dennis Mapa says even granular lockdowns could derail the gains in employment.

"Yung data noong October 2020, kung saan may lockdowns tayo na localized, ito ang isa sa mga quarters kung saan mababa ang labor force participation,” Mapa said.

(Our data from October 2020 showed that in areas that were put under localized lockdowns, labor force participation also decreased.)

Mapa said higher unemployment would also have an impact on consumption and economic growth. Philippine GDP contracted by 9.5 percent in 2020 in the worst recession for the Philippines since World War 2.

Economic managers said the vaccination program will be key to avoiding this.

“This is a leap forward for our healthcare system and the entire country. The added confidence it provides will boost our recovery further. We aim to provide vaccines to at least 70 million Filipinos this year, or 100 percent of the entire adult population.”

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