Wednesday, 17 June 2009

Ranks of jobless down to 7.5% in April

Ronnel Domingo
With reports from Kristine L. Alave and Reuters
Philippine Daily Inquirer
http://business.inquirer.net/money/topstories/view/20090616-210843/Ranks-of-jobless-down-to-75-in-April

MANILA, Philippines—Government and private sector efforts to provide jobs amid a global downturn helped pare down the unemployment rate to 7.5 percent in April from 8 percent in the same month last year.

The April figure was also slightly lower than that of January, when unemployment was reported at 7.7 percent.

Based on the National Statistics Office’s latest Labor Force Survey, the number of new jobs created outpaced the number of those who joined the country’s horde of workers.

There were some 1.37 million people 15 years and older who had joined the labor force—beefing it up by 3.8 percent to 37.82 million—in April from 36.45 million in the same month of 2008.

Of these, 34.99 million have jobs—about 1.458 million more than the 33.54 million seen last year.

Also, the unemployed numbered 2.83 million in April, or some 84,000 less than the 2.914 million jobless reported a year ago.

“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 a 7.1-percent growth,” Economic Planning Secretary Ralph G. Recto said.

However, the underemployment rate—those with jobs but want to work more—climbed slightly to 18.9 percent in April against 18.2 percent in January.

Analysts said the rise in the underemployment rate pointed to mounting pressures on the labor market, aggravated by returning Filipino workers who lost their jobs overseas due to the global recession.

“There is clearly pressure on the labor market, not just due to economic slowdown, but also going forward with remittance growth showing further downside,” said Simon Wong, economist at Standard Chartered Bank in Hong Kong.

The underemployed workers climbed to 6.62 million from 6.24 million in the same period. Of the total underemployed, 62.6 percent worked less than 40 hours a week in April, higher than 60.8 percent in January.

“While people seem to be busy, it is not the full 8 hours or 40 hours a week, so that is where the weakness of the recent statistics may come in,” said Jun Trinidad, economist at Citigroup. “This suggests that it can still encourage people not to spend.”

Also, the Philippines has the second highest jobless rate among the biggest Southeast Asian economies. It is behind Indonesia which reported an unemployment rate of 8.14 percent as of February.

Thailand’s jobless rate was at 1.9 percent in February, below Malaysia’s 3.3 percent at end 2008. Singapore’s first quarter seasonally adjusted jobless rate was 3.3 percent, a three-year high.

Job cuts and reduced work hours in the Philippines have been on the rise, mainly in the electronics sector, which account for over half of the country’s exports, with demand still weak.

Officials said last month the economy’s 2.3 percent contraction in the first quarter was partly due to weak personal spending as people saved their money due to the uncertainty on the depth of the global downturn.

At least 6,500 Filipino workers returned from abroad, mainly Taiwan, since October as the global recession hit the manufacturing sector, based on data from the overseas workers welfare agency.

Data from the Department of Labor and Employment show that from October 2008 to March 2009, the global financial crisis took its toll on a total of 109,429 domestic workers.

The Department of Labor and Employment was heartened by the slight dip in the unemployment rate, saying it showed that the government’s effort to mitigate the effects of the crisis on labor were effective.

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