The Philippine labor market in October 2020 showed further signs of recovery as economic activities and mobility with strict adherence to safety and health protocols continued to resume, the National Economic and Development Authority (NEDA) said.
The Philippine Statistics Authority’s latest Labor Force Survey (LFS) showed that the country’s unemployment rate improved to 8.7 percent in October 2020 from 10.0 percent in July and 17.6 percent in April. This translated to 0.8 million less unemployed workers in this round compared with July 2020. However, lower labor force participation more than offset this, resulting in a net employment reduction of 1.5 million from July to October.
The Philippine Statistics Authority’s latest Labor Force Survey (LFS) showed that the country’s unemployment rate improved to 8.7 percent in October 2020 from 10.0 percent in July and 17.6 percent in April.
“This improvement in the unemployment rate was driven by the reopening of the economy and it could have been lower if the economy were opened further, coupled with the provision of safe and sufficient public transport. On the other hand, the country was also hit by a succession of four typhoons in October alongside the monsoon and La Niña, resulting in significant employment loss in agriculture,” said Acting Socioeconomic Planning Secretary Karl Kendrick T. Chua.
In the latter half of October, the country was hit by typhoons Nika, Ofel, Pepito, and Quinta which contributed to the reduction of agriculture employment by 1.1 million, or about 70 percent of the 1.5 million jobs lost between July and October 2020. Workers in the provinces also faced difficulty in returning to work given inter-province transport restrictions, and contributed to the 0.5 million loss in the industry sector.
The employment loss was tempered by the services sector, which recorded a 0.3 million gain in employment relative to July 2020, as it benefitted from the increased operational capacity and further relaxation of quarantine restrictions.
Lower labor force participation also contributed to the decline in employment. This can be attributed to a number of factors, including higher remittances and the opening of school with parents shifting from work to accompanying younger children in blended learning from home.
Meanwhile, the underemployment rate notably improved to 14.4 percent in October 2020 from 17.3 percent and 18.9 percent in July and April 2020, respectively.
“Decreasing underemployment means that the quality of jobs is improving. This proximity to normalcy means that the informal sector is performing and the impact on poverty may be less severe than initially estimated,” he said.
Chua cited the Senate’s recent approval of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill which will provide relief especially for MSMEs which comprise 99 percent of firms in the Philippines and employ about 60 percent of working Filipinos.
“The swift passage and implementation of CREATE, together with the 2021 General Appropriations Act, the Financial Institutions Strategic Transfer (FIST) Act, and the Government Financial Institutions Unified Initiative to Distressed Enterprises for Economic Recovery (GUIDE) Act will all contribute to rebuilding the economy and helping Filipinos and businesses get back on their feet,” said the NEDA chief.
Overall, the Labor Force Survey results support the need to manage risks more and further open the economy safely to restore jobs and economic activities.