Jobless rate seen easing further due to ‘BBB’

File photo of job applicant at a government job fair from CNN Philippines (

The country’s unemployment rate could fall further as civil works on nine infrastructure projects under the “Build, Build, Build” (BBB) program would begin in the second half of 2018, according to the National Economic and Development Authority (Neda).

Neda Undersecretary for Planning and Policy Rosemarie G. Edillon also told the BusinessMirror that BBB projects would help the government achieve its goal of creating 1 million jobs this year.

The Philippine Statistics Authority (PSA) released on Wednesday the results of the January 2018 Labor Force Survey (LFS), which showed that the unemployment rate declined to 5.3 percent. The Neda said this is the lowest jobless rate recorded for all rounds of the January LFS in the past decade and is within the government’s target of 4.7 percent to 5.3 percent.

“There is already a boom in public construction. That is the reason for the 13.2-percent increase in jobs in the sector. But you’re right in saying that this is not yet [due to] the BBB,” Edillon said in an interview.

“The government is still working out the job requirements… for the different combinations of the BBB projects,” she added.

Former Labor Undersecretary and University of the Philippines economist Rene Ofreneo agreed with Edillon’s pronouncement that the BBB program could help create more jobs in the coming months.

“It seems the government is moving faster now compared to previous years. Maybe [Budget Secretary Benjamin E.] Diokno released funds [for government infrastructure projects] faster,” Ofreneo told the BusinessMirror.

He said, however, that risks, such as the ban on deployment to Kuwait and the possible closure of Boracay island, could threaten efforts of the government to create more jobs.

Ofreneo also noted that the real challenge for the Philippines is to increase employment in heavy industries, which will provide jobs to more Filipinos.

Socioeconomic Planning Secretary Ernesto M. Pernia pushed for the passage of key measures such as the Ease of Doing Business bill and Package 2 of the government’s tax-reform program, which will lower the corporate income tax and rationalize fiscal incentives.

Pernia also called for the crafting of a legal and regulatory framework that will allow part-time work, especially in low-paying jobs.

“This will especially benefit school dropouts so they can study or be trained further and get themselves into higher paying jobs in the future,” he said.

Employment situation

The January 2018 LFS showed the country’s jobless rate eased to 5.3 percent, from 6.6 percent a year ago. The latest LFS data indicated that 41.8 million Filipinos are employed.

PSA data also indicated that the underemployment rate went up to 18 percent in January 2018, from last year’s 16.3 percent.

“These improvements in the labor market indicate that more Filipinos are encouraged to join and rejoin the labor force, and that more people are being employed. This signals that the economy is responding positively to the economic reforms and programs that the government has been laying down,” Pernia said.

PSA data showed that the share of agriculture in total employment expanded to 26 percent in January 2018, from 25.5 percent in January 2017, while industry’s share also rose to 18.1 percent, from 17.4 percent last year.

Edillon and Ofreneo agreed that the improvement in agriculture employment was due to the relatively good weather conditions experienced in the last quarter of 2017.

Usually, Ofreneo said the Philippines is hit by destructive typhoons in the fourth quarter. But the absence of typhoons during the period may have allowed more farmers to hire additional workers for their annual December harvest.

PSA data also showed the industry sector employed an additional 719,000 workers after expanding by 10.5 percentage points to 18.1 percent in January 2018, led by the increase in employment in construction and manufacturing.

“More jobs are expected to be created during the country’s infrastructure buildup, which will not only ease traffic and promote regional development but also generate more quality jobs,” Pernia said.

Services, meanwhile, was the only sector that saw a lower share in 2018 at 55.9 percent, from 57.1 percent in 2017.

Ofreneo said this may be due to the possibility that the business-process outsourcing sector has already hit a plateau. He also cited as a factor the decline in tourism activities in Mindanao due to the Marawi City siege.

However, Edillon said that, while the share of services was lower than last year, there was still an increase in the actual number of jobs created in the sector.

“In terms of job generation, there was an increase of 3.8 percent over the previous year. There may have been some reallocation, hence the lower share. But absolute numbers increased,” she said.

‘Ineffective order’

Federation of Free Workers  Vice President Julius Cainglet said the 1.3-percent hike in underemployment shows that Department Order (DO) 174 issued by the Department of Labor and Employment (DOLE) is “ineffective.” DO 174 imposed more stringent rules on contractualization.

“We can also relate this to the contractualization of labor, which DO 174 has failed to address. Our workers may have work today, but there is no certainty of work tomorrow,” Cainglet told the BusinessMirror.

Associated Labor Union-Trade Union Congress of the Philippines  spokesperson Alan Tanjusay said this also a cause for concern, since underemployment has been rising in the last three years.

“If reports about regularization of workers in fast-food chains, malls, telecom companies among others are accurate; and granting that the DTI’s [Department of Trade and Industry] formula of regularizing workers with the service providers and manpower agencies instead of the principal employer have been applied, all these should not translate or add up to a mere 1.3 percent in the employment rate,” Cainglet said.

Tanjusay said only a few contractual workers benefited from the government’s campaign against the controversial work scheme.

“The DOLE reported regularization of 120,000 after DO 174 took effect in March last year. It’s a very small number,” Tanjusay said.

With Samuel P. Medenilla

Turning Points 2018
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A professional journalist for over a decade, Cai U. Ordinario currently writes macroeconomic and urban development stories for BusinessMirror. She has received awards for excellence in reporting on the macroeconomy and statistics. She was also cited for her contribution to statics reporting by the National Statistical Coordination Board (now the Philippine Statistics Authority). She is a recipient of journalism fellowships including the Jefferson Fellowship from the Honolulu-based East West Center. She is currently completing her Masters degree in Communication at the University of the Philippines. She graduated with a degree of Bachelor of Arts Major in Journalism from the University of Santo Tomas.