Jobless rate higher in April

Labor market conditions slightly worsened in April, data from the Philippine Statistics Authority (PSA) showed on Friday, with the numbers of Filipinos without jobs or looking for more work rising from a month and a year earlier.

Unemployment edged up to 4.1 percent from 3.9 percent in March and the year-ago 4.0 percent, equivalent to an estimated 2.06 million jobless Filipinos — higher than the prior month's 1.93 million and the year-earlier 2.04 million.

Underemployment — a measure of those wanting more hours of work or an additional job — rose to 14.6 percent, unchanged from a year ago but higher than March's 13.4 million.

This was equivalent to an estimated 7.09 million Filipinos and was higher than the 6.44 million and 7.04 million respectively recorded in a month earlier and in April 2024.

Labor force expands

National Statistician and PSA chief Claire Dennis Mapa explained that the rise in the jobless rate was caused by an increase in the number of people entering the labor force.

The labor force participation rate, which measures how much of the working-age population is employed or looking for work, rose to 63.7 percent in April, up from March's 62.9 percent but lower than April 2024's 64.1 percent.

Mapa said that not all of the 340,000 individuals that had joined the workforce were able to find employment.

The number of individuals with jobs reached 48.67 million, higher than March's 48.02 million and the year-ago 48.35 million.

The country's labor force numbered 50.73 million in April, up from 49.96 million in March and 50.39 million a year earlier.

The youth LFPR rose to 31.8 percent from 29.4 percent in the prior month, but eased from April 2024's 32.6 percent.

Unemployment in this sector rose to 11.5 percent from 11.0 percent in March and 10.5 percent a year ago, while underemployment eased to 13.4 percent from 14.1 percent and 13.8 percent a month and a year earlier.

The service sector remained the biggest employer with a 61.9-percent share, followed by agriculture at 20.6 percent and industry at 17.5 percent.

Wage and salary workers continued to account for the largest share of employed persons at 63.2 percent.

Wage hike worry

With the House of Representatives having approved a P200 per day pay hike for all minimum wage earners in the country, Mapa said the agency would be monitoring which sectors would be particularly affected should the bill become law.

"The PSA will monitor and look into which sectors show increases or decreases. Normally, different sectors are affected, but right now, we can't tell yet because it hasn't been implemented," he said.

"The impact on the different sub-sectors of our labor market may vary."

The proposal still has to be approved by the Senate, which last year passed a measure calling for a P100 increase, and any reconciled version needs to be passed by Congress as a whole.

Malacañang, meanwhile, said that President Ferdinand Marcos Jr. would be weighing the economic impact before deciding whether to approve or veto the bill.

Lawmakers have come under fire from business groups, which said that a legislated nationwide wage hike disregards regional disparities and could lead to job losses. They also said that existing law states that wage-setting should be done by regional wage boards.

Rizal Commercial Banking Corp. chief economist Michael Ricafort agreed with the warning, saying "some businesses, especially those facing challenges on sales, could reduce workers due to higher wages or could even close down and lead to more job losses."

"Some foreign investors could also consider other countries with lower labor costs and overall cost of production, as another risk that could lead to foregone investment and employment opportunities, or could lead to some shift in operations to other countries with lower labor costs and overall production costs," he added.

Resilient labor market

Despite the slight uptick in unemployment, Socioeconomic Planning Undersecretary Rosemarie Edillion said that the Philippine labor market continues to demonstrate resilience amid global headwinds.

"We remain on track to meet our target unemployment range of 4.4 to 4.7 percent set under the Philippine Development Plan 2023-2028," she said in a statement.

"Also, we are optimistic about further improving our labor force in the months and years ahead, especially with the rollout of the Trabaho Para sa Bayan Plan and the influx of new investments."

Edillon outlined government efforts to boost jobseekers' and workers' employability, including improvements to the technical-vocational-livelihood track in senior high school, internships for new graduates and skills training.

To help workers stay adaptable, she stressed the need to prioritize a national policy on lifelong learning. Supporting this will be proper implementation of the Expanded Tertiary Education Equivalency and Accreditation Programs.

Edillon also said that the government would keep pushing for measures that increase the productivity of local industries, especially those that offer better-quality jobs, to strengthen the labor market against global challenges.

"Attracting more investments to generate higher-quality and better-paying jobs, particularly in manufacturing and higher-value-added services, and expanding into new markets is essential to broadening our economy and opening up more job opportunities for Filipino workers," she said.

Source: Manila Times

PHL shows solid growth momentum

The Philippines’ growth momentum remains “broadly stable,” even as global trade tensions would make it hard to hit the 6-8% growth target in the next two years, an Organisation for Economic Co-operation and Development (OECD) economist said.

“The Philippines continues to show very solid growth momentum, supported by domestic demand and somewhat by public investment,” OECD economist Cyrille Schwellnus said at a briefing on Wednesday.

In its latest Economic Outlook, the OECD projected below-target growth for the Philippines for 2025 and 2026. It sees the Philippine economy growing by 5.6% this year, and picking up to 6% in 2026.

Mr. Schwellnus cited robust labor market and election-tied expenditure as main drivers of growth.

“But investment is going through a soft patch, growing well below its average over the past three years. Exports, again, are growing at a healthy pace. But we expect that to weaken on the back of escalating global trade tensions,” he said.

In April, the US slapped higher reciprocal tariffs on most of its trading partners’ goods exports, though this has been suspended until July, except for the baseline 10% which still remains in effect. The US slapped the Philippines with a 17% reciprocal tariff, the second lowest among its neighbors.

Mr. Schwellnus said the government’s 6-8% growth target is “perfectly attainable” in the medium term.

“But in the very short term, in 2025, 2026, we see [the target] as difficult to reach,” Mr. Schwellnus said.

In the first quarter, gross domestic product (GDP) grew by a weaker-than-expected 5.4% amid heightened uncertainty arising from the Trump administration’s tariff policies.

“Now in 2025, we have additional headwinds, especially from the external side, so a slowdown of global trade, but also on the domestic side, where we see some fiscal consolidation going on over the next couple of years,” Mr. Schwellnus said.

The OECD cut its global growth outlook to 2.9% in both 2025 and 2026, noting that “substantial barriers to trade, tighter financial conditions, diminishing confidence and heightened policy uncertainty are projected to have adverse impacts on growth.”

The OECD noted the possible impact of the global economic slowdown on remittances from overseas Filipino workers.

“If there were to be a larger-than-expected slowdown in major economies, such as the US or China, that would, of course, have an effect on exports of the Philippines, and it might also impact remittance flows, which would then impact domestic consumption and investment,” Mr. Schwellnus said.

However, the OECD said the impact on remittance flows was not accounted for in its growth projection for the Philippines.

Mr. Schwellnus said the Philippines can immediately implement reforms, especially to reduce barriers to foreign direct investment.

In the same report, the OECD projected that inflation would settle at 2% this year and 3.1% in 2026 “amid balanced domestic demand and currency stability.”

“Looking ahead, we expect inflation to gradually return to 3% as food prices stabilize and monetary policy continues to ease,” he said.

BSP Governor Eli M. Remolona, Jr. earlier said cooling inflation has given them “plenty of room” to cut rates this year. Mr. Remolona said they could deliver two more rate cuts this year, in “baby steps” of 25 basis points.

SERVICES UNAFFECTED

Meanwhile, the Philippines’ services sector is unlikely to be impacted by the US tariff policies, S&P Global Ratings said, though the industry could eventually face strains in the coming years.

“In the Philippines, the story is more nuanced. The Philippines is active in the export of certain things. One is services, especially business process outsourcing. It is a big factor for the Philippine economy,” S&P Global Ratings Senior Economist Vishrut Rana said in a webinar.

The service sector will likely be sheltered from the initial impact of the trade tensions, he said.

“One element of shelter is that for services. Trade seems to be unaffected by the tariff measures for the time being. It could come under pressure over the next few years,” he added.

United States President Donald J. Trump’s reciprocal tariffs have only covered goods, not services.

Meanwhile, the credit rater also noted that the Philippines’ electronics exports are also spared for the time being.

“The Philippines is also a significant player in the electronic supply chain in Asia and the Pacific (APAC). However, for the time being, it doesn’t seem to be a focus area,” Mr. Rana said.

The US’ reciprocal tariffs will not apply to certain goods, such as semiconductors, copper, pharmaceuticals, gold, and minerals that are not available in the US, according to the White House’s April 2 tariff announcement.

Electronic products were the top commodity export of the Philippines last year, accounting for more than half or 53.4% of its total exports.

“On broader trade, there could be some pressure on the electronic space. We are watching that at the moment,” Mr. Rana said. “For now, the APAC electronic sector is performing relatively well, which is supporting the sector in the Philippines also.”

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Source: Business World

Inflation cools to 1.3% in May, slowest pace in nearly 6 years

The country’s inflation rate further eased to 1.3 percent in May from 1.4 percent in the previous month on the back of lower utility costs and slower price gains in restaurants and accommodation services.

This matched the median estimate of 13 economists polled by Inquirer last week. It also settled within the Bangko Sentral ng Pilipinas’ forecast range of 0.9 percent to 1.7 percent for May.

Inflation rates Philippines 24-25

The latest consumer price data also marked the slowest pace since November 2019, the Philippine Statistics Authority (PSA) reported on Thursday.

The index of housing, water, electricity, gas and other fuels eased to 2.3 percent from 2.9 percent in the previous month.

The restaurant and accommodation services index cooled to 2 percent during the month from 2.3 percent in April.

Overall, the latest reading landed below the lower-end of the official target range of 2 to 4 percent.

As it is, another month of benign inflation would support the ongoing easing cycle of the local central bank, which has so far trimmed the benchmark rate that banks typically use when pricing loans to 5.5 percent.

Source: Inquirer