THE number of jobless Filipinos declined in May and several key production sectors posted growth in full-time employment, the Philippine Statistics Authority (PSA) reported on Thursday.
The economic managers saw this as an indication of a Philippine “economy on the mend,” but private economists are more cautious.
The PSA reported that only 3.73 million Filipinos were jobless in May compared to 4.14 million in April 2021. This translated to an unemployment rate of 7.7 percent.
A total of 1.45 million jobs were generated between April 2021 and May 2021. Full-time employment across all production sectors grew 13.4 percent—industry posted a 22.1-percent growth while services, 12.3 percent.
“Of course that’s good news. Sustaining employment [but] growth recovery will all depend on how we contain the spread of the Delta variant or new mutations,” Action for Economic Reforms (AER) Coordination Filomeno Sta. Ana III told the BusinessMirror.
Services jobs
PSA data showed Filipinos working in the services sector made up the bulk of the labor force with 25.867 million workers in May 2021. This represented a 4.2-percent growth from 24.825 million in April 2021.
Most of these workers are full-time employees at 17.9 million in May 2021, a 12.3-percent increase over the 15.937 million recorded in April 2021.
Ateneo Center for Research and Development (Acerd) Associate Director Ser Percival K. Peña-Reyes told the BusinessMirror that in the services sector, the biggest drivers are arts and entertainment with a growth of 26 percent, and information and communication, an increase of 19.4 percent.
The increase of jobs in the arts and entertainment area is a reflection of how Filipinos are coping these days while the growth in ICT jobs, he said, reflected the ongoing digitization of the Philippine economy.
Peña-Reyes added that job generation in the financial and insurance activities also did well with a 14.4-percent rise; and real-estate activities, with growth of 13.6 percent.
He said financial and insurance services have been deemed among the resilient industries, able to keep providing jobs for millions.
In terms of real estate, Peña-Reyes said this may be driven by the need for alternative work arrangements as well as the need for space for Covid facilities.
“It’s a good sign, yes. But I cannot really say that it’s a sure sign of recovery. We still have a long way to go in our vaccination efforts and restoring confidence in our economy,” Peña-Reyes said.
“I see these changes more as shifts in economic activity to cope with the ongoing pandemic. [Our recovery] depends on how quickly we roll out vaccination in the coming months,” he added.
Income increase
The Philippine Statistics Authority (PSA) told the BusinessMirror, however, the improvement of the employment numbers means a possible increase in income and disposable income.
This bodes well for the purchase of “consumer goods/services including capital goods.” Consumption spending accounts for 70 percent of the Philippine economy.
However, University of Asia and the Pacific (UA&P) School of Economics Dean Cid L. Terosa thinks the recovery of the services sector is only “a faint” sign of the economy’s recovery.
Terosa said overall, the country still faces the same risks and opportunities. The risks include new Covid-19 cases while opportunities include vaccinations.
“I think data on the growth of jobs in the services sector is a faint sign of the gradual recovery of domestic demand. The economy obviously needs to show stronger indications of economic recovery,” Terosa said.
Former Labor Undersecretary Rene E. Ofreneo agreed and said the loosening of restrictions especially in the National Capital Region and surrounding areas helped boost job creation, especially in services.
The services sector contributes a large chunk of the country’s GDP and is considered bigger than industry and agriculture.
Sta. Ana noted, though, that service sector jobs are more informal and that jobs in sectors like manufacturing are “better indicators of job quality.”
“The problem is that the services sector is dualistic, or consists of two segments—the formal sector [mainly wholesale-retail and other service industries] and the informal sector [huge because entry is easy but jobs generally marginal],” Ofreneo said.
Economy on the mend
The economic managers—Socioeconomic Planning Secretary Karl Kendrick T. Chua; Finance Secretary Carlos G. Dominguez III; and Budget Secretary Wendel E. Avisado—maintained that the data showed an economy on the mend.
In a joint statement, the economic managers said the improved employment data showed the impact of the lowering of the quarantine restrictions in NCR Plus, as well as the progress of the government’s vaccination program.
They also noted that the labor force participation rate increased from 63.2 percent in April to 64.6 percent in May. Coupled with the decrease in unemployment, this led to the creation of 1.5 million jobs between April and May 2021.
Following the trend of recovery from previous months, they said the total employment remains above pre-Covid-19 levels with a net job creation of 2.2 million since January 2020.
“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 said.
However, the economic team believes sustaining these employment gains and achieving the government’s 6- to 7-percent growth target this year will require more effort.
These efforts include implementing the recovery package, which includes the National Employment Recovery Strategy (NERS) that was adopted through Executive Order 140.
The recovery package should go with the acceleration of the vaccine roll-out, they said.
“Both will facilitate the continued safe reopening of the economy to modified GCQ or better at the appropriate time,” they said.
The economic managers said vaccination of the A5 sector or the indigent population has also started. With an additional 27 million doses scheduled to arrive from now until August 2021, they expect the vaccination program to proceed faster.
The government aims to inoculate 70 million Filipinos or the entire adult population by the end of the year. To date, vaccine deployment has reached as high as 355,000 per day.
Image credits: Nonie Reyes