Philippines’ August jobless rate declines

The Philippines’ unemployment rate fell to 3.9% in August, reflecting stronger hiring momentum as the labor market recovered from midyear slack.

The number of jobless Filipinos fell to 2.03 million from 2.59 million in July and 2.07 million a year earlier, the Philippine Statistics Authority said on Wednesday.

The employment rate improved to 96.1% from 94.7% in July, with total employed persons rising to 50.1 million. The jobless rate was 4% a year earlier and 5.3% in July.

The labor force participation rate climbed to 65.1% from 60.7% in July, equivalent to 52.13 million Filipinos aged 15 and older either working or seeking work.

On average, employees worked 41 hours a week, up from 40.7 hours in August last year.

The service sector remained the country’s biggest employer, accounting for 61.5% of total jobs, followed by agriculture at 20.4% and industry at 18.1%. Wholesale and retail trade, agriculture and forestry, and construction were the top employing subsectors.

Underemployment eased to 10.7% from 14.8% in July, with 5.38 million workers saying they wanted more hours or an additional job. Of the underemployed workers in August, 62.4% worked less than 40 hours a week, while 37.6% worked 40 hours or more a week.

Youth employment also improved, with the employment rate among those aged 15 to 24 rising to 88.3% from 81.9% in July, the local statistics agency said.

Source: Business World

Philippine annual inflation at 1.7% in September

Philippine annual inflation quickened for a second month, but it was still below the central bank’s 2% to 4% comfort range for the year, reinforcing expectations that a policy decision this week will be a close call between cutting rates and pausing.

The consumer price index rose 1.7% in September led by higher food prices, up from August’s 1.5%, the statistics agency said on Tuesday. It was below the 2.0% median forecast in a Reuters poll, and brought year-to-date average inflation to 1.7%.

The September rate, the fastest since March, comes just days before the central bank’s penultimate policy meeting of the year on Thursday.

“For the upcoming policy meeting, the Monetary Board will review newly available information and reassess the impact of prior monetary actions in light of evolving economic conditions and their implications for inflation and growth,” the Philippine central bank said in a statement.

At its August policy meeting, the Bangko Sentral ng Pilipinas (BSP) signalled another reduction was still possible this year before it concludes its easing cycle.

Ahead of the data, HSBC economist Aris Dacanay said in a note the October 9 policy decision could be a close call between a pause and another rate cut.

Mr. Dacanay said he expects the BSP to keep its key policy rate unchanged at 5.0%, following three consecutive quarter-point reductions. He added that a 25-basis-point cut remains possible at the BSP’s December meeting.

“While waiting for more data to come, inflation concerns, particularly on food, should also weigh on the decision,” Mr. Dacanay said.

Food inflation in September slightly accelerated to 0.8% from 0.6% in August, driven mainly by higher prices of vegetables, tubers, plantains, and cooking bananas, the statistics agency said.

Core inflation, which strips out volatile food and energy prices, was at 2.6%, close to the previous month’s 2.7%.

Source: Business World

Philippines declines a spot in economic freedom index

The Philippines slipped one spot in a global index on economic freedom, despite improvements in some areas, according to the Canada-based think tank Fraser Institute.

The country ranked 62^nd out of 165 economies in conservative think tank’s Economic Freedom of the World report, which uses 2023 data. In the previous year’s index, the Philippines ranked 61^st place.

This was the Philippines’ lowest placement in the index in two years, or since it ranked 68^th in 2021.

Despite the lower ranking, the country’s score inched up to 7.05 out of 10 in 2023 from 7.01 in 2022.

Among Asia-Pacific jurisdictions, the Philippines lagged behind Hong Kong (8.55), Singapore (8.50), New Zealand (8.33), Australia (8.03), Taiwan (8.03), Japan (7.83), Malaysia (7.56), South Korea (7.53), Thailand (7.10), and Brunei Darussalam (7.09).

However, the Philippines was ahead of Indonesia (6.96), Mongolia (6.83), Cambodia (6.79), Vietnam (6.21), China (6.13), Papua New Guinea (6.09), Fiji (6.08), Timor-Leste (5.97), Laos (5.65), and Myanmar (4.46).

The index measures the degree to which citizens are allowed to make their own economic choices through five areas: size of government, legal system and property rights, sound money, freedom to trade internationally, and regulation.

The Philippines had its highest score in the sound money category with 9.01, ranking 34^th out of the 165 countries, slightly lower than its previous score of 9.04.

The country’s score in size of government went up to 7.88 from 7.77 previously. Its current ranking was at 21^st place from 26^th previously.

Manila’s score in regulation also went up to 6.65 (64^th) from 6.55 (67^th) previously.

However, the country yet again performed worst in the legal system and property rights area with a score of 4.57, ranking 109^th. Its score slightly improved from 4.55 previously.

Meanwhile, its score in freedom to trade internationally stood at 7.15, ranking 86^th from 87^th previously.

Foundation for Economic Freedom President Calixto V. Chikiamco said that the Philippines continues to underperform in the areas of legal system and property rights and trade freedom.

“Particularly in agricultural trade. We are still protecting our agricultural sector with quotas, high tariffs, and other forms of restrictions,” he said in a Viber message.

Meanwhile, Mr. Chikiamco said that the previous administration’s unilateral cancellation of the contracts with the private water concessionaires and refusal to abide by the decision of arbitration proceedings have impacted the country’s overall ranking.

“That and other instances where contracts aren’t honored cause low ratings of the country [in legal system and property rights],” he added.

However, Mr. Chikiamco said that the slight dip in the country’s ranking may also be attributed to improvements in other countries.

“The Philippines can fare better by dismantling agricultural protectionism, reforming an inefficient and corrupt judicial system, removing the Filipino First and Filipino Only provisions in the Constitution, and forging more free trade agreements with more economies,” he added.

Philippine Institute for Development Studies Senior Research Fellow John Paolo R. Rivera said that the results of the index suggest that the Philippines is making progress, but “other economies are reforming faster and more comprehensively.”

“We continue to lag in critical areas like rule of law, regulatory quality, judicial independence, and most especially corruption control, which weigh down its overall ranking,” he said in a Viber message.

To improve, he said that there is a need for the Philippines to strengthen its institutional frameworks.

“It must also enforce property rights, simplify regulations, and promote a more transparent and predictable policy environment to boost investor confidence and economic dynamism,” Mr. Rivera said.

According to the Fraser Institute, economic freedom has been declining since the pandemic.

“Global economic freedom peaked in 2019 but has declined in each of the four years since then, which hasn’t happened since we began measuring economic freedom more than 25 years ago,” Matthew Mitchell, a senior fellow at the Fraser Institute, said in the report.

Hong Kong topped the latest index, followed by Singapore, New Zealand, Switzerland, the United States, Ireland, Australia and Taiwan (tied for 7^th), Denmark, and the Netherlands.

However, the Fraser Institute expects US President Donald J. Trump’s tariffs to further depress US economic freedom.

“When countries move to restrict trade freedom, other areas of economic freedom, such as size of government, sound money, and regulatory freedom, often soon follow,” it added.

Meanwhile, the lowest scoring economies on the index were Venezuela, Zimbabwe, Sudan, Algeria, Iran, Myanmar, Argentina, Syria, Libya, and Chad.

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Source: Business World