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Tuesday, June 16, 2009


With an improved unemployment rate in April recorded at 7.5 percent based on the Labor Force Survey of the National Statistics Office (NSO), the National Economic and Development Authority (NEDA) is urging the government to accelerate spending to gain back lost remunerative jobs and create more with better quality.

"In the crisis you would expect unemployment to worsen, as it did in many other countries. But here, unemployment even improved and that's because of the implementation of the Economic Resiliency Plan (ERP). With the domestic economy gaining more traction and as there are early indicators of the bottoming-out of the global crisis, it is paramount for government to accelerate its spending to return lost remunerative jobs, if not create better quality ones," Socioeconomic Planning Secretary and NEDA Director General Ralph G. Recto said.

        He further recommended to (1) fast-track the infrastructure projects in the next three quarters of the year to absorb the displaced workers from the construction sector and its allied industries; (2) intensify and improve the regular monitoring of the accomplishments of the government's Comprehensive Livelihood and Emergency Employment Program (CLEEP) and the commitments of the private sector on employment creation; (3) continue the tripartite (government, business, and labor) dialogue focusing on improving firm-level productivity given the benign possibility of wage discussions this year, so that industries are better prepared for competition in the eventual race for the rebound; (4) continue the various intervention programs on improving support services, reducing input costs, and modernizing infrastructure (e.g. irrigation and shallow tube wells, farm-to-market roads); (5) ensure that the trainings and scholarships for the young labor force are calibrated to the needs of the industries, particularly for sharpening competitiveness in preparation for the rebound; (6) rapidly deploy OFWs in countries where demand is high, and; (7) take advantage of possible further monetary easing consistent with non-inflationary growth for the development of micro, small and medium enterprises.

The unemployment rate improved to 7.5 percent in April 2009 from 8.0 percent in the same period last year. The labor force grew by 3.8 percent, slightly less than the employment growth of 4.3 percent.

"With some additional 1.37 million labor entrants competing for employment, the unemployment level was contained by massive government and private sector initiatives and hiring programs," Recto said.

These programs include the CLEEP; provisions of Executive Order 782 on emergency hiring vis-à-vis the government's Rationalization Plan; multi-sectoral summits and tripartite consultations on saving jobs, livelihoods and flexible working arrangements; and the accelerated frontloading of infrastructure projects under the Economic Resiliency Plan (ERP).  

"It is worth noting that the unemployment rate in April this year was almost as good as the April 2007 unemployment rate of 7.4 percent, the year when the economy had posted 7.1 percent GDP growth," Recto further said adding that this year's rate was also lower than the comparative period in April 2008 notwithstanding the earlier occurrence of massive lay-offs due to the global crisis and the lagged effects of the passage of budget on the ERP.  

In his memorandum to the President, Recto likewise said that employment growth was broad-based as all major industry groups posted gains.

Establishing its being the catch-basin of employment, the services sector led the growth in employment with a 5.8-percent increase over the year ago level or an additional 964,000 in employment. This came from wholesale and retail trade (358,000); private households with employed persons (146,000); public administration and defense, compulsory social security (133,000); real estate, renting and business activities (70,000); other community, social and personal service activities (64,000); hotels and restaurants (53,000); transport, storage and communication (53,000); education (40,000); health and social work (24,000); financial intermediation (23,000);and those working in extra-territorial organizations and bodies (1,000).  

The agriculture, fishery and forestry sector, on the other hand, managed to record a 3.4-percent growth in employment. It contributed about 408,000 net employment as the production of agriculture, forestry and fish products for local final demand and food manufactures continued to enjoy high demand, supported by government's improvements of irrigation systems, its seeds dispersal system and generally declining fertilizer prices. Cheap but healthy products in these times of crisis were especially sought, along with production for the growing halal markets.

Industry managed to squeeze in 1.7 percent growth even as it continued to bear the brunt of the bleak external environment with employment generation of 86,000. The marked 43,000 employment losses in manufacturing were fortunately offset by employment generated in construction (108,000); and the relatively stable employment in mining and quarrying (15,000); and, utilities (7,000).

The total net employment generation reached about 1.46 million compared to the 169,000 net employment losses a year ago. In April this year, total employed persons increased to 34.99 million from 33.54 million in the same period last year.

Meanwhile, the proportion of those who were already working but still wanted more work declined to 18.9 percent or approximately 6.622 million employed persons in April 2009, compared to 19.8 percent or 6.625 million in April 2008.

"This was the lowest April survey round underemployment rate since April 2007 when it registered the same rate," Recto said.

Most of the visibly underemployed (working less than 40 hours) were working in the agriculture sector (56.8 percent), followed by services (31.6 percent) and industry (11.6 percent) sectors. The decline in total underemployment mostly came from manufacturing; transport, storage and communications; fishing; education; other community, social and personal service activities; and, financial intermediation sectors.

Moreover, the bulk of the employed continued to come from the more remunerative wage and salaried class of workers (51.9 percent), which grew by 2.5 percent. This, however, was a deceleration from its share in April 2008 (52.9 percent) with a corresponding strong rise among unpaid family workers, which grew by 9.4 percent as many workers helped their own families in farming and fishing; small-time manufacturing; small-time mining and quarrying; hotel and restaurant business; and, health and social work.

Own-account employment, which includes self-employed and employer, grew 5.3 percent, with increases in wholesale, retail trade and repairs; agriculture, hunting and forestry; transport, communications and storage; fishing; real estate; manufacturing; mining and quarrying; health and social work; hotels and restaurants; utilities; and, financial intermediation.

In terms of hours worked, while the level of part-time workers increased by 2.38 million or a 19.9 percent growth, the number of full-time workers, which comprised the bulk of total employment, declined by 4.5 percent to 19.823 million for the said period.  

Recto said that the total mean hours worked declined to 39.8 hours from April 2008's 41.6, reflective of the various efforts of government and private firms to save jobs through flexible work arrangements. He added that this may have implications on the take-home income of workers.

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