Underemployment drops to lowest rate in over a decade
Photo: President Duterte sitting with his economic team

MANILA -- The country’s underemployment rate fell to its lowest in over a decade indicating the improvement of the quality of work nationwide, the National Economic and Development Authority (NEDA) said in a statement on Wednesday.

Based on the October round of the Labor Force Survey (LFS) of the Philippine Statistics Authority, underemployment rate dropped to 13.3 percent in October 2018 from 15.9 percent in October 2017.

This is equivalent to 1.1 million less underemployed workers from last year’s 6.6 million. This is the lowest underemployment rate recorded for all months of October since 2006 (20.3 percent).

“This signals that the quality of work is improving even outside the National Capital Region (NCR). We attribute this to expanding employment opportunities and the approval of nominal increases in regional wages supported by labor productivity improvements,” Socioeconomic Planning Secretary Ernesto M. Pernia said.

Underemployment rate in areas outside NCR significantly declined to 14.6 percent in October 2018 from 17.0 percent in 2017, also the lowest in over a decade.

Also, the percentage of discouraged job seekers decreased to 11.5 percent, which is better than the 12.0 percent target for 2018.

However, of the total youth population, 19.9 percent is neither in employment nor in education in 2018, but still falling within the PDP target of 19.5-21.5 percent.

Meanwhile, the unemployment rate for October 2018 slightly inched up to 5.1 percent, equivalent to 2.2 million unemployed persons, compared with last year. Still, the 5.3 percent unemployment rate for 2018 is at the upper end of the PDP 2018 target range of 4.7 to 5.3 percent.

NEDA said the government is on track with respect to four out of seven employment targets specified in the Philippine Development Plan (PDP) 2017-2022.

“To meet our targets, we need to fast-track strategic efforts to achieve all of our end-of-plan targets towards full and inclusive employment. There is a need to improve social protection programs for workers while providing flexibility for firms to adjust to changing market conditions. This should be complemented with the provision of unemployment insurance to support the income of displaced workers, who will be negatively affected by economic disruptions,” Pernia said.

The labor survey recorded around 826,000 employment generated in 2018, falling behind the government’s annual target of 900,000 to 1.1 million employment.

On meeting this target, Pernia urged the simplification of issuing business permits and licenses, and even reduction of fees.

In terms of gender, only 46.6 percent of women were recorded to be in the labor force for 2018, which is below the 49.7 percent target set for the period.

Similarly, the labor force participation rate dropped to 60.6 percent, mainly due to more youth opting for full-time studies, and females opting out of work due to household duties.

“We need to encourage more women to join the workforce, considering that our country has a high proportion of well-educated women. The recently passed Telecommuting Act will help ensure that both men and women can better share responsibilities at home, while still being productively engaged at work,” said Pernia. "Likewise, faster implementation of the Responsible Parenthood and Reproductive Health Law will also help women pursue continuing education and careers in the marketplace."

Meanwhile, youth unemployment remained high at 13.3 percent compared with the PDP 2018 target of 10.4 percent.

Pernia said more programs that address youth unemployment, a recurring concern, are needed like restructuring academic curricula designed for 21st-century skills, as well as strengthening linkages between schools and the private sector.