The unemployment rate declined to 7.7 percent in May from 8.7 percent in April, as 1.45 million jobs were created following the easing of community quarantine restrictions in the National Capital Region and adjacent provinces, and the faster implementation of the COVID-19 vaccination program, the Philippine Statistics Authority said Thursday.
Results of the May 2021 Labor Force Survey showed the May figure was the second lowest unemployment rate since the start of the year, following 7.1 percent in March. It was also lower than the unemployment rate in January (8.7 percent) and February 2021 (8.8 percent).
Government economic managers led by Finance Secretary Carlos Dominguez III, Budget Secretary Wendel Avisado and Economic Planning Secretary Karl Kendrick Chua said in a joint statement the latest employment data highlighted the strong link between quarantine restrictions and labor market outcomes.
“More stringent quarantines to arrest the spread of the virus had temporarily affected our economic and employment gains in the first four months of 2021,” they said.
“Nevertheless, the lowering of the quarantine level in the National Capital Region Plus to general community quarantine on May 15, along with the faster rollout of the vaccination program, led to gains in labor and employment figures in May 2021,” the Cabinet’s economic team said.
The total number of unemployed individuals 15 years old and over decreased by 408,000 individuals from 4.14 million in April 2021 to 3.73 million in May 2021.
The labor force participation rate in May was placed at 64.6 percent, equivalent to 48.45 million individuals who were either employed or unemployed. This was higher than the LFPR reported in the months of January (60.5 percent), February (63.5 percent), and April (63.2 percent) of 2021.
Employment rate in May 2021 (92.3 percent) rebounded from the previous month, although slightly lower than the highest employment rate this year at 92.9 percent in March. The May 2021 employment rate was higher than the rates reported in January (91.3 percent), February 2021 (91.2 percent), and April 2021 (91.3 percent).
Total employed persons reached 44.72 million in May or 1.45 million higher than previous month’s level of 43.27 million. Employed persons reported with job but not at work dropped to 1.4 percent in May from 2.5 percent in April.
Meanwhile, the average weekly hours worked by an employed person in May increased to 39 hours from 38 hours in April. It was, however, lower than 39.7 hours per week in March 2021.
Underemployment rate in May was estimated at 12.3 percent, the lowest reported since January 2021. In terms of magnitude, about 5.49 million persons were reported underemployed in May 2021. The highest estimate was reported in February 2021 at 7.85 million.
ING Bank Manila senior economist Nicholas Mapa said that with authorities relaxing mobility restrictions by mid-May, both unemployment and underemployment improved.
“Hopefully, should the economy continue to reopen, we will see more work hours available to employees which will in turn help drive a faster rebuild of drawdown savings and an eventual return to robust consumption,” Mapa said.
Mapa said despite the improvement in labor market metrics, “we note that the current unemployment rate remains still quite distant from the 5.4 percent average pre-COVID 19 and we will need to work harder to get back to that level and pace of job creation.”
Economic managers said the significant improvements in the labor situation point to an economy on the mend. They said 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.
“To sustain our gains and achieve a 6 to 7 percent economic growth in 2021, we need to implement our recovery package, which includes the National Employment Recovery Strategy adopted through Executive Order No. 140, and accelerate the rollout of our vaccination program. Both will facilitate the continued safe reopening of the economy to modified GCQ or better at the appropriate time,” they said.