Rise in Unemployment Rate in the Philippines

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The unemployment rate in the Philippines increased in January compared to the previous month, according to a report by the Philippine Statistics Authority (PSA). The rate rose to 4.5 percent in January, up from 3.1 percent in December. However, it is still lower than the 4.8 percent recorded in the same month last year.

This rise in unemployment translated to 2.15 million unemployed Filipinos, which is 550,000 more than the number in December. Nevertheless, it is lower than the 2.38 million recorded in January last year, indicating a year-on-year decrease of 230,000 jobless individuals.

Furthermore, underemployment, which refers to those who are already employed but are seeking additional work or an extra job, also increased to 13.9 percent from 11.9 percent in December. However, it is slightly lower than the 14.1 percent recorded in January 2023. The number of underemployed individuals reached 6.39 million.

Despite these increases in unemployment and underemployment, the employment rate remained relatively high at 95.5 percent in January, compared to 96.9 percent in December. However, it is slightly lower than the 95.2 percent recorded in January 2023.

In January, the number of individuals with jobs decreased to 45.94 million from 50.52 million in December. In January 2022, the figure stood at 47.35 million.

The services sector continued to dominate the labor market in January, accounting for 60.2 percent of the employed persons.

The decline in employment and rise in unemployment can be attributed to the diminished labor demand after the “peak of seasonality” in December of the previous year, according to Claire Dennis Mapa, the chief of the Philippine Statistics Authority.

Socioeconomic Planning Secretary Arsenio Balisacan emphasized the government’s commitment to creating a business-friendly environment to attract local and foreign investments and generate high-quality employment opportunities. Balisacan also highlighted the need to strengthen linkages between industry, academia, and the public sector to address skill mismatches in the labor market.

The decrease in labor force participation rates was particularly notable among women, the youth cohort, and junior high school graduates. Reasons for not entering the labor force included household responsibilities, age-related constraints, and engagement in schooling.

The return to onsite work has resulted in a decrease in women’s participation, dropping from 53.7 percent in January 2023 to 49.3 percent. Full-time onsite schooling has also led to a decline in the youth labor force participation rate, from 34.8 percent to 29.6 percent.

Efforts will be made to address the needs of vulnerable groups, including women, youth, older individuals, and those with disabilities. The existing policy framework governing alternative work arrangements will be revisited to ensure inclusivity and flexibility.

Chinabank Research noted that despite the rise in unemployment, the quality of jobs has shown improvement, as evidenced by the increase in wage and salary workers. The research firm expects the labor market to remain robust throughout the year, with lower inflation and potential interest rate cuts in the second half of the year, which would create a better environment for businesses. A strong labor market is crucial for supporting consumption activities and contributing to the country’s economic growth outlook.

Chairman Jose Maria Clemente “Joey” Salceda of the House Ways and Means Committee believes that the year-on-year drop in job figures suggests that existing jobs are becoming more durable, while new jobs are in the process of being created. While the situation remains positive, it is important to remain cautious as the gains from the recovery could be sensitive to potential shocks.

In conclusion, the rise in the unemployment rate in the Philippines in January highlights the challenges faced by the labor market. Efforts are being made to address skill mismatches, strengthen linkages between different sectors, and support vulnerable groups. Despite the increase in unemployment, the quality of jobs has shown improvement, and the labor market is expected to remain robust. However, it is crucial to remain vigilant and responsive to potential shocks that could impact the gains made in the recovery process.

Source: The Manila Times

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