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May Unemployment Rate Falls As Lockdown Curbs Ease

The country's jobs situation improved in May as the ranks of unemployed and underemployed Filipinos fell after lockdown curbs were eased, data from the Philippine Statistics Authority (PSA) showed.

Preliminary results of the May 2021 round of the Labor Force Survey released on Thursday put the country’s unemployment rate at 7.7%, down from the 8.7% recorded in April.

This was the second-lowest unemployment rate recorded since the start of the year, following the 7.1% posted in March.

This was equivalent to 3.730 million jobless Filipinos in May, down from 4.138 million in April.

Likewise, the underemployment rate — the proportion of those already working, but still looking for more work or longer working hours — improved to 12.3% in May from 17.2% in April. This was the lowest underemployment rate since the PSA started tracking jobs figures on a monthly basis this year.

In absolute terms, this equated to 5.492 million underemployed Filipinos in May, lower than the 7.453 million the previous month.

The size of the labor force was approximately 48.446 million in May, up from 47.407 million in April. This brought the labor force participation rate to 64.6% of the country’s working-age population in May from 63.2% the previous month.

In a joint statement, Socioeconomic Planning Secretary Karl Kendrick T. Chua, Finance Secretary Carlos G. Dominguez III and Budget Secretary Wendel E. Avisado said the recent jobs data continue to reflect the “strong link between quarantine restrictions and labor market outcomes.”

“More stringent quarantines to arrest the spread of the virus had temporarily affected our economic and employment gains in the first four months of 2021. Nevertheless, the lowering of the quarantine level in the National Capital Region (NCR) Plus to general community quarantine on May 15, along with the faster rollout of the vaccination program, led to gains in labor and employment figures in May 2021,” the economic managers said.

The government had placed NCR and nearby provinces under strict lockdowns from March to mid-May to address the surge in coronavirus disease 2019 (COVID-19) infections.

The economic managers also pointed to the increase in labor force participation and the decline in unemployment, which led to the creation of 1.5 million jobs between April and May this year.

“Following the trend of recovery from the previous months, total employment remains above pre-COVID-19 levels with a net job creation of 2.2 million since January 2020,” they said.

“These significant improvements point to an economy on the mend. As the economy was further reopened in the second half of May, more Filipinos were able to re-join the labor force and earn sufficient income, as indicated by the lower underemployment rate,” they added.

ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the drop in underemployment was a “welcome development” despite the average number of hours at work remaining below 40 per week.

“This development… could indicate that job seekers are slowly accepting lower job hours and willing to work under these conditions given the downbeat economic conditions. Hopefully, should the economy continue to reopen, we will see more work hours available to employees which will in turn help drive a faster rebuild of drawn down savings and an eventual return to robust consumption,” Mr. Mapa said in a statement to reporters.

The employment rate stood at 92.3% in May from 91.3% in April. This was equivalent to 44.716 million people in May from 43.269 million previously.

The service sector made up 57.8% of total employment in May, inching up from the 57.4% in April. The industry sector likewise saw its employment rate slightly improve to 18.4% during the period from 18.2%.

Meanwhile, the employment rate in agriculture stood at 23.8%, down from 24.4%.

Between April and May, services saw the most jobs generated on a net basis at about 1.042 million, followed by industry’s 338,362 and agriculture’s 66,103.


Despite these gains, ING’s Mr. Mapa said that prospects for economic recovery remain uncertain.

“Given the potential spread of new variants and the possible reversal of [community quarantines] to tighter measures, it will be difficult to say for certain whether [the May result] is a sustainable trend… [D]espite the improvement in labor market metrics, we note that the current unemployment rate remains still quite distant from the 5.4% average pre-COVID-19 and we will need to work harder to get back to that level and pace of job creation,” Mr. Mapa said.

Bank of the Philippine Islands (BPI) Lead Economist Emilio S. Neri, Jr. said the “uninterrupted reopening” of the economy will be crucial to sustain the gains in the labor market throughout the year.

“Getting the jobless rate to the 6% handle is possible if we can sustain a calibrated stimulus, avoid a major surge in infections and capitalize on the opportunities offered by the rapid recovery of developed economies,” Mr. Neri said.

There are 51,567 active COVID-19 cases in the country as of July 1, Health department data showed.

Moreover, there are 17 cases of a “Delta” COVID-19 variant detected among returning Filipino travelers. First detected in India, the variant is said to be a more transmissible form of COVID-19 and is reportedly behind the renewed surge in cases in other countries.

Meanwhile, the economic managers cited the need to accelerate the rollout of the vaccination program and to implement the recovery package that includes the National Employment Recovery Strategy (NERS) in order to sustain the gains in the labor market and achieve an annual 6-7% economic growth this year.

President Rodrigo R. Duterte signed Executive Order No. 140, which creates a NERS task force in charge of implementing the government’s plan to restore employment until 2022.

The recovery plan, which is anchored on the Updated Philippine Development Plan 2017-2022, seeks to create a policy environment that encourages the generation of and improved access to employment, as well as livelihood and training opportunities.

Meanwhile, Health department data as of June 27 showed a total of 10.065 million administered COVID-19 vaccine doses in the country. Of these, 2.527 million Filipinos have received the second dose and are thus considered to be fully vaccinated.

Source: BusinessWorld and PSA

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