Jobless rate eases to 3-year low in ’22
THE PHILIPPINES’ unemployment rate eased to a three-year low of 5.4% in 2022, despite a slight uptick in December, the Philippine Statistics Authority (PSA) said on Wednesday.
Preliminary results from the PSA showed the unemployment rate stood at 4.3% in December, a tad higher than November’s 4.2% jobless rate but smaller than the 6.6% in December 2021.
The PSA said there were 2.22 million jobless Filipinos in December, up 43,000 from the 2.18 million unemployed in November. However, this was a better than the 3.28 million jobless recorded in December 2021.
This brought the full-year jobless rate to 5.4%, which is the lowest since the 5.1% in 2019 or before the coronavirus pandemic, PSA Undersecretary and National Statistician Claire Dennis S. Mapa said during the briefing.
This was equivalent to 2.67 jobless Filipinos last year, the lowest number since 2.26 million in 2019. In 2021, the unemployment rate stood at 7.8%, equivalent to 3.71 million.
“The government remains committed to providing more, better and green job opportunities to Filipinos and sustaining a vibrant labor market through the strategies articulated in the Philippine Development Plan 2023-2028,” National Economic and Development Authority Secretary Arsenio M. Balisacan said in the statement.
Job quality improved in December, as the underemployment rate fell to 12.6% from 14.4% in November and the 14.7% in December 2021. This translated to 6.197 million underemployed Filipinos or persons already working but still looking for more work or longer working hours.
For 2022, the underemployment rate averaged 14.2%, the lowest in three years or since the 14% in 2019.
PSA data showed the size of the labor force population reached 51.22 million in December, bringing the labor force participation rate (LFPR) to 66.4% of the country’s working-age population. This was lower than the 67.5% seen in November.
Last year, LFPR averaged to 64.7%, the largest share since the redefinition of the jobs situation survey in 2005.
The employment rate dipped to 95.7% in December, from 95.8% in the previous month. This means 49 million Filipinos had jobs in December, about 704,000 less than in November.
For the full year, the share of employed persons was at 94.6%, also the largest since 94.9% in 2019.
On average, an employed Filipino worked 40.3 hours a week in December, higher than the 39.3 hours logged the previous month and the 39.7 hours in the same month in 2021.
SEASONAL TREND?ING Bank N.V. Manila Senior Economist Nicholas Antonio T. Mapa said the holiday season in December may have affected the manufacturing subsector as factories had their year-end shutdown.
“We also saw a decrease in jobs for the wholesale and retail trade, possibly as holiday spending wound down post-Christmas. We did see some offsetting increase in agriculture employment, but this was unable to fully offset the decrease,” Mr. Mapa said.
In terms of sectoral share of employment, services remained the top employer in December with an employment rate of 58.9%, down from 60.5% in November. Likewise, the share of workers in the industry sector narrowed to 17.1% from 18.1% previously.
The agriculture sector accounted for 24% of the total employed persons in December, up from 21.4% in November.
“Employment losses were seen in manufacturing, wholesale and retail trade, and accommodation and food service activities. This came as a surprise as we anticipated higher demand in these sectors given the holiday season,” China Banking Corp. Chief Economist Domini S. Velasquez said in a report sent to BusinessWorld.
Manufacturing, which accounts for about 44.7% of the industry sector, shed more than half a million jobs month on month in December.
Wholesale and retail trade, which accounts for 37.9% of the services sector, dropped 387,000 workers month on month in December.
MIXED OUTLOOKAfter the month-on-month rise in unemployment in December, Ms. Velasquez said she expects “slightly worse figures” in January.
“However, as the economy continues its vigorous growth in 2023, the labor market will likely remain strong, posting unemployment rates around 5% moving forward,” she said.
“On the downside, although we have not seen layoffs in 2022 despite an environment of high interest rates, further monetary tightening might eventually push businesses to reduce the number of workers. Approval of another round of wage hike this year will also be a significant risk to the labor market,” she added.
For ING Bank’s Mr. Mapa, manufacturing jobs may see gains as factor activity hit a seven-month high in January, citing the S&P Global Philippines’ latest Purchasing Managers’ Index (PMI) report.
“Manufacturing activity was jumpstarted in January so we could see an improvement on this front. Slower growth may reverse some of the gains so far. We can hopefully see the unemployment rate stay at these levels while seeing the underemployment rate fall. This would signal improved job creation quality,” ING’s Mr. Mapa said the jobs market will take its cue from the economy’s recovery this year.
“Unfortunately, we believe growth momentum has the odds stacked against it given surging inflation and rising borrowing costs,” he added.
Inflation soared to a 14-year high of 8.7% in January, fueling bets of further interest rate hikes to anchor expectations.
The Monetary Board increased the benchmark key rate by 350 bps to a 14-year high of 5.5% in 2022. Its next policy review meeting is on Feb. 16.
The BSP sees inflation averaging 4.5% this year before easing to 2.8% in 2024. — Ana Olivia A. Tirona