Informal sector swelling, jobs data suggest

Workers prepare to cook suman, or steamed glutinous rice wrapped in coconut leaves, in Antipolo City, January 29, 2020.
Workers prepare to cook suman, or steamed glutinous rice wrapped in coconut leaves, in Antipolo City, January 29, 2020.

THE latest employment data hints at the possible expansion of the informal sector as quality jobs remain unavailable, according to local groups.

In an e-mail to BusinessMirror, former dean of the School of Labor and Industrial Relations (SOLAIR) and President of the Freedom from Debt Coalition (FDC) Rene E. Ofreneo said this is possible given that unemployment is declining but underemployment is on the rise.

Ofreneo said while the elections brought Filipinos opportunities to be employed, many of these jobs were temporary. This indicates “inadequate employment” opportunities in the Philippines will continue.

“The reality is that there is a need to have a more comprehensive concept of  ‘inadequate employment’ —inadequate in terms of hours of work, inadequate in  terms of expected compensation or income, inadequate in terms of skills-jobs matching, etc. During the election fever, many Filipinos were able to secure extra jobs because of  rich politicians. But most of the jobs are short-term,” Ofreneo said.

“If unemployment does not increase, this means jobs in the informal sector continue to increase. Informal (jobs are) those that belong to the category of ‘with jobs’ but inadequate,” he added.

Ibon’s take

Ibon Foundation Inc. also highlighted the problem of increasing informality in the economy. It said many Filipinos continue to “make do” with whatever work is available, even if these are “unsecure, irregular and not decent.”

By class of worker, Ibon said, the drop in the number of wage and salary workers is concerning since this means more informal jobs, said the group.

The number of wage and salary workers fell by 469,000 to 28.2 million in May 2022 from 28.7 million in April 2022. Declines were mostly among those that worked in government or government corporations (by 281,000) and private establishments (by 179,000).

Another indication of worsening informality among employed persons is the growing number of self-employed and unpaid family workers.

It noted that the number of self-employed without any paid employees rose by 569,000 to 13.2 million from 12.6 million. Unpaid family workers increased by 542,000 to 3.8 million from 3.2 million.

“The new administration’s plan to just increase ‘employability’ through education, training and skills development is not enough. Boldly reforming the economy starting with boosting the country’s own production sectors and not of big and foreign profit-driven businesses will deliver steady jobs, decent incomes, higher productivity, and a genuinely livelier economy, said the group,” Ibon said.

More Filipinos are also ending up in part-time jobs, said the group. By hours worked, the number of those that worked less than 40 hours increased by 439,000 to 16.7 million in May 2022 from 16.3 million in April 2022.

Ibon said since February, the number of part-time workers has been increasing by a monthly average of 922,000.

Further, Ibon said full-time workers or those who worked 40 hours and over decreased by 6,000 while those “with a job, not at work” increased by 18,000.

“The country’s economic instability will only worsen the jobs crisis. Government not taking action and providing real economic stimulus through cash assistance to poor households, wage subsidies and support to small businesses and producers amplifies the effects of a weakening economy,” Ibon said.

On Thursday, the Philippine Statistics Authority (PSA) reported that 2.93 million Filipinos are unemployed while 6.67 million are underemployed in May.

The PSA noted that this translated to an unemployment rate of 6 percent and underemployment rate of 14.5 percent in May 2022. In May last year, unemployment was at 7.7 percent and underemployment was at 12.3 percent.

PSA data showed a total of 4.52 million Filipinos were visibly underemployed and 2.144 million, invisibly underemployed.

The number of Filipinos considered invisibly underemployed increased by 620,000 between May 2021 and May 2022; while visibly underemployed workers increased by 557,000 during the 12-month period.

Underemployed persons are employed persons who expressed a desire to have additional hours of work in their present job or to have an additional job, or to have a new job with longer hours of work.

Invisible underemployment is experienced by underemployed persons who are working at least 40 hours in a week, while visible underemployment is experienced by underemployed persons working less than 40 hours in a week.

Image credits: Junpinzon | Dreamstime.com


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