Unemployment rate eases, but underemployment rises in July as labor force shrinks


Posted at Sep 07 2021 09:57 AM | Updated as of Sep 07 2021 03:43 PM

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MANILA (UPDATE) - Fewer people were jobless in July, but more people also said their jobs were insufficient that month and were looking for more work, the state statistics bureau said on Tuesday. 

Fewer people were also classified as jobless as millions gave up looking for work thus taking themselves out of the labor force, according to the Philippine Statistics Authority. 

The Philippines’ unemployment rate eased to 6.9 percent in July, PSA said, meaning there were around 3.1 million unemployed individuals aged 15 years old and over.

This number was an improvement over the 4.14 million (8.7 percent) unemployed in April, and the 4.57 million (10 percent) unemployed in July last year. 

But the PSA also noted that the labor force, or people of employment age who were actually looking for work, actually shrank.

ABS-CBN Data Analytics, data from PSA
ABS-CBN Data Analytics, data from PSA

From a total labor force of 47.41 million in April, the workforce fell to 44.74 million in July. This means 2.67 million Filipinos gave up on looking for work. 

“Mas dumami ang number ng mga hindi nag participate [in]July 2021 versus July 2020 dahil naniniwala sila na walang available work,” said National Statitician Dennis Mapa Jr. 

(The number of people who did not participate in July 2021 was higher because they believed that there was no work available.)

ABS-CBN Data Analytics, data from PSA
ABS-CBN Data Analytics, data from PSA

Underemployment also climbed to 20.9 percent in July from 17.2 percent in April. This means that there were 8.7 million people who said that they were looking for more work because their work was insufficient.

The July underemployment rate was the highest since the first lockdowns were imposed in April last year. 

Ironically, the underemployment rate climbed even as the average work hours exceeded the 40-hour minimum definition for full-time work in July. 

“The average weekly hours worked by an employed person in July 2021 was 41.8 hours in a week. This is the highest mean hours worked in a week by employed persons this year. In July 2020, the average hours worked of [an] employed person in a week was 38.2 hours,” the PSA said.

Unemployment rate

This means more Filipinos were working full time in July compared to April this year and July 2020, but many still felt that they did not have enough work.

“Dito sa 40 hours and above, may mga workers na invisibly underemployed sila, gusto nila ng mas maraming trabaho, or new job,” Mapa said. 

(For those who worked 40 hours and above, there were ‘invisibly underemployed’ who still wanted more work or a new job.)

Mapa said they don’t collect data to ascertain whether or not the labor force respondents were complaining about the quality of jobs available. They could only conclude that there was an increase of individuals, both part-time and full-time workers, who wanted more or new work. 

The Asian Development Bank however noted as early as April that while joblessness has receded this year, the jobs created in the wake of the pandemic lockdowns were of lower quality compared to the jobs available before the COVID-19 outbreak.

ADB said these lower-quality jobs were in the informal sector or had no job security.

A job-matching company also said in July that the quality of jobs created in the wake of the pandemic were still not up to par with the jobs available before the outbreak.

“By broad industry group, the services sector continued to account for the largest share of employed persons with 57.9 percent, agriculture sector followed with 22.1 percent, and the industry sector with the least share of employed persons with 20.0 percent,” the PSA said.

Employed persons in the industry and services sectors increased by 7.2 percent and 6.6 percent, respectively, from July 2020 to July 2021, according to the PSA.

On the other hand, workers in the agriculture sector decreased by 15.5 percent over the same period. 

Philippine economic manager meanwhile said the July Jobs data showed signs of improvement in the labor market.

Socioeconomic Planning Secretary Karl Chua, Finance Secretary Carlos Dominguez, and Budget Department Officer in Charge Tina Rose Marie Canda also said they are hoping new policies on lockdowns will help to preserve those gains moving forward.

“The unemployment rate fell to its lowest since the start of the pandemic due to more relaxed quarantines, but risk aversion and precautionary behavior led to a decrease in the labor force participation rate,” they said in a statement.

Economic managers said they back the shift to granular lockdowns, which they said will help economic recovery. 

The August jobs report, which will reflect the impact of the latest return to ECQ, is due out on Sept. 30. 

- With a report from Warren de Guzman and Edson Guido, ABS-CN News