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

Philippine jobs ‘exposed’ to AI risks estimated at 35-37%

Between 35% and 37% of Philippine jobs are at risk of displacement to artificial intelligence (AI), the World Bank said.

“About 35% to 37% are exposed” to AI risks, World Bank Group Lead Economist and Program Leader for the Prosperity Unit for Brunei, Malaysia and the Philippines, Gonzalo Varela told a panel.

He also noted the high adoption of generative AI in the operations of the Information Technology Business Process Management industry.

The IT and Business Process Association of the Philippines in December reported that 67% of its surveyed members are already using AI in customer service, data entry, and quality assurance, though challenges persist.

However, 8% of its members surveyed reduced their workforce because of AI.

In a separate report in August, the bank said the Philippines ranked fourth in ChatGPT traffic as of March 2024.

The World Bank noted that five middle-income countries — Brazil, India, Indonesia, Mexico and the Philippines — showed “generative AI traffic levels significantly higher relative to the US than their other metrics would suggest.”

Bilal Khan Muhammad, social sector economist at the Asian Development Bank, noted that AI advancements are now impacting white-collar jobs, with many tasks being performed by AI tools.

“But then with the recent advancements in AI, we also see white-collar jobs have also been replaced by these AI tools where we are seeing a lot of tasks now can be performed by the AI itself.

You just ask the AI to help you with the representation or format a document or help you prepare a draft,” he said.

Mr. Varela said AI could be a “productivity shock” and provide opportunities for workers in the Philippines.

The government’s Trabaho Para Sa Bayan plan needs to explore how “to take advantage of the technological changes that are going to affect job creation,” he added.

At the same event, the departments of Economy, Planning, and Development (DEPDev), Trade and Industry and Labor and Employment, launched the Trabaho Para sa Bayan Plan 2025-2034.

The 10-year plan aims to strengthen and future-proof the workforce.

The plan includes a research agenda to gauge the impact of AI on labor demand across various industries, job roles, and skill levels, and identify vulnerable occupations.

Labor Secretary Bienvenido E. Laguesma said the government has yet to firm up a national policy on AI.

“We believe that AI can supplement, can complement, but cannot replace,” he told reporters. 

Mr. Laguesma noted that the National Innovation Council, chaired by President Ferdinand R. Marcos, Jr., approved the creation of a think tank which will create a roadmap for AI use.

The think tank, whose lead agency will be the Department of Science and Technology, will guide the drafting of AI policy.

“Protection does not mean retention. It could mean upgrading, looking for another job, facilitating their employment, and the provision of social safety nets. That’s where we are,” Mr. Laguesma said.

Meanwhile, DEPDev Undersecretary Rosemarie G. Edillon noted that the low exposure of AI stems from the overall low level of technology adoption in the Philippines.

“Underlying all this, especially on the part of data and then creating models, this is really where you will need this policy on ethics, on the use of AI,” she added.

Source: Business World

Government unveils 10-yr. jobs masterplan

The Philippines government on Monday launched a 10-year employment masterplan, which is targeting to increase the labor force participation rate (LFPR) to 68.2% by 2034.

“This is a very ambitious plan. If you look at the targets, it’s simple, we want to raise our LFPR from 64% to 68%,” Department of Economy, Planning, and Development (DEPDev) Undersecretary Rosemarie G. Edillon told reporters.

“So, this is actually a big ask, especially since by 2035, the majority of the workforce will be coming from Gen Z and Gen Alpha. So, we actually need a big policy reform,” she added.

Launched by the DEPDev, the Department of Trade and Industry (DTI), and the Department of Labor and Employment, the Trabaho Para sa Bayan (TPB) Plan aims to strengthen and future-proof the country’s workforce.

Under the plan, the government set near-term and long-term initiatives aimed at addressing challenges faced by the local labor market, such as rapid digitalization, geopolitical tensions, climate change, and demographic shifts.

Ms. Edillon said that the country’s LFPR is the lowest among the Association of Southeast Asian Nation (ASEAN) countries.

“Taking out the COVID-19 (coronavirus disease 2019) years, our LFPR is about less than 65%, but for the other countries, it is actually in the high 60s. You have Vietnam over there with an LFPR in the high 70s,” she added.

Preliminary data from the Philippine Statistics Authority showed that LFPR in February was estimated at 64.5%. For the first two months, the average LFPR stood at 64.2%.

However, the new jobs masterplan did not indicate any targets on how many jobs will be created until 2034.

“The problem with having a target with respect to jobs is that it’s very difficult, especially since we are moving towards a framework for flexible work arrangements where it would be possible for you to hold more than one job,” said Ms. Edillon.

“We’re also moving towards having a framework for part-time jobs. So, it’s difficult [to see] how it will translate into the number of jobs,” she added.

Labor Secretary Bienvenido E. Laguesma said that there have been previous targets to create a million jobs.

“But this does not ensure there will be enough jobs created for the new entrants (to the labor market),” he said.

“It’s not that simple to say that we want to create one or two million jobs by a certain year. What we want to see is that every Filipino family will have a job,” he added.

The TPB Plan also set a target of decreasing the unemployment rate to 3% by 2034 from 3.8% in 2024 and the underemployment rate to 7-9% from 13.3% last year.

In addition, the masterplan also aims to increase the female LFPR to 59% by 2034, which Ms. Edillon said is the lowest in the ASEAN region.

“Ours is about 48.8%, while in Vietnam it is actually 72.5%. So can you just imagine how much more human capital we could add if we could actually increase the LFPR for women?” she added.

The TPB Plan is also targeting to improve the country’s domestic industry diversification and production, as well as export complexity.

Citing the Global Innovation Index, Ms. Edillon said that the two factors measure the level of sophistication of the economy.

“That is actually the goal, that we will be a more competitive country before 2034. So that is actually the goal of the National Innovation Agenda and Strategy Document,” she added.

The TPB Plan outlines priority strategies that aim to address labor demand, supply, and governance, as well as how to future-proof labor demand, supply, and governance.

Strategies to ensure labor demand include expansion of market access, encouraging investments in priority sectors, ensuring ease of doing business, establishment of a dynamic innovation ecosystem, and promotion of technology adoption and enterprise-based education and training.

To improve labor supply, the TPB Plan recognized the need to expand lifelong learning opportunities, upgrade the design of skills training programs, enhance overseas Filipino reintegration programs, and increase program take-up among disadvantaged sectors.

Meanwhile, the TPB also cited 18 policy recommendations, which are seen to create an “inclusive and dynamic labor market environment.”

These policies include the Konektadong Pinoy bill, the Lifelong Learning Development Bill, tax incentives for employees on a work-from-home program, the Freelancers’ Protection Act, and the Amendment of the Maternity Leave Law, among others.

Source: Business World