The unemployment rate rises to the highest level in three months

By means of Abigail Marie P. Yraola, Deputy Head of Investigation

THE PHILIPPINE unemployment rate rose to a three-month high in April as job quality deteriorated. the Philippine Statistics Authority (PSA) reported on Thursday.

Preliminary data from the PSA’s latest Labor Force Survey (LFS) shows that the national unemployment rate – the share of unemployed Filipinos in the total labor force – rose to 4% in April from 3.9% in March, but lower than 4.5% a year ago.

April saw the highest unemployment rate in three months, or since 4.5% in January.

This translated to 2.04 million unemployed Filipinos in April, an increase of 41,000 from March. That was 215,000 lower than the 2.26 million unemployed a year ago.

For the FDuring the first four months, the unemployment rate averaged 4%, lower than 4.7% in the same period a year ago.

PSA Undersecretary and National Statistician Claire Dennis S. Mapa said El Niño was the main culprit for the increase in the unemployment rate, especially in the agricultural sector.

“We saw that crop production in the Fthe first quarter decreased due to the impact of El Niño. Because production was lower, you have that drop in (the number of) employees,” Mr. Mapa said in a mix of English and Filipino during the brie.Fing.

The agricultural sector is the country’s second largest employer, contributing over a tenth to the economy.

“The slight increase in the unemployment rate, together with the sharp increase in underemployment, reFteaches economicsic and seasonal Fluctuations, sector speciFic recessions, and possible structural changes within the economy,” said Robert Dan J. Roces, chief economist at Security Bank Corp. in a Viber message.

Mr Roces said the impact of El Niño has reduced demand for labor in the agricultural sector, which will ultimately impact related industries such as food processing and distribution.

At the same time, job quality deteriorated in April as the unemployment rate rose to 14.6% from 11% in March and 12.9% in April 2023.

PSA data showed that the unemployment rate in April was the highest in nine months, or since 15.9% in July 2023.

The number of underemployed Filipinos — those who want longer work hours or an additional job — rose to 7.04 million in April, up 1.65 million from March.

So far, the average unemployment rate has been 13%.

“The increase in underemployment can be attributed to certain subsectors, namely wholesale and retail trade, agriculture and forestry and accommodation and food service activities,” said PSA’s Mr Mapa.

In contrast, the labor force participation rate fell from 96.1% in March to 96% in April, but is still an improvement from 95.5% in April last year.

This equated to 48.36 million working Filipinos in April, down 798,000 from 49.15 million working persons in the previous month.

Year after year, 297,000 Filipinos were employed.

The employment rate averaged 96% in the Ffirst four months compared to 95.3% a year earlier.

PSA data also showed that 50.40 million people were in the labor force in April 2024. The size of the working population fell by 757,000 month on month, but grew by 82,000 compared to 50.31 million in April 2023.

As a result, the labor force participation rate (LFPR) – the share of the labor force (15 years and older) that makes up the total labor force – fell to 64.1% in April, down from 65.3% in March and 65.1% a year ago.

To date, the average LFPR has been 63.8%.

“The government wants to help Filipino workers in the digital age. “Initiatives include shortening job search times, upskilling the workforce and facilitating the transition to higher-income jobs,” he said.

By sector, the services sector remained the largest employer in April with an employment rate of 61.4%, followed by agriculture with 20.3% and industry with 18.3%.

In April, agriculture and forestry saw jobs fall by 684,000 to 8.35 million, the largest monthly loss among the sectors. It was followed by wholesale and retail trade (from 602,000 to 10.14 million) and public administration and defense (from 466,000 to 2.82 million).

Meanwhile, month-on-month employment increases were recorded in fishing and aquaculture (up from 413,000 to 1.44 million), transport and storage (up from 192,000 to 3.75 million), and accommodation and food services (an increase from 192,000 to 2.75 million).

On an annual basis, agriculture and forestry sheds the most employees with 818,000, followed by wholesale and retail trade (-587,000) and healthcare and social work (-85,000).

On the other hand, accommodation and catering activities recorded the largest annual job growth in April, with an increase of 638,000 employees. In the construction sector, the number of employees increased by 378,000, while the number of transport and storage services increased by 289,000.

Wage workers still had the largest share of the labor force, at 63.6% in April.

The average Filipino worker worked 40.5 hours per week in April, down from 40.7 hours in March but still up from 36.9 hours in April last year.

Makoto Tsuchiya, an economist at Oxford Economics, expects the country’s unemployment rate to rise this year, peaking at around 4.5%, against the backdrop of declining domestic demand and tepid global growth.

Julius H. Cainglet, vice president for Research, Advocacy and Partnerships at the Federation of Free Workers, said continued agricultural imports have hurt jobs in the domestic agricultural sector.

In an email, he said it is crucial that key industries and small businesses receive government support to improve working conditions and create more decent employment opportunities.

According to Mr Roces, the outlook for the labor market will depend on several factors, such as potential economic recovery, policy interventions, seasonal trends and the continued impact of El Niño.

“While emerging sectors may offer new opportunities, stability will depend on how these variables develop in the coming months,” Roces said.

The latest LFS was conducted from April 8 to 20, with 44,890 sample households.