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Monday, June 24, 2024

Unemployment rate rose to 4.5% driven by inflation, interest rates

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The country’s unemployment rate in September 2023 slightly increased to 4.5 percent from 4.4 percent a month ago, partly driven by elevated inflation and higher interest rates, data from the Philippine Statistics Authority (PSA) showed.

“Inflation really impacted some sectors but not all sectors,” national statistician and civil registrar general Dennis Mapa said in an online briefing.

In particular, he cited the 722,000 drop in the wholesale and retail trade sector. It could be noted that inflation in September picked up to 6.1 percent, the fastest in four months since the 6.1% in May 2023.

PSA data showed that the September jobless rate was still lower compared to the five percent a year ago. This represents a year-on-year decrease of 234,000 unemployed individuals.

The PSA said the employment rate in September 2023 was estimated at 95.5%, higher than the recorded employment rate in September 2022 at 95% but slightly lower than the 95.6% estimate in August 2023.

In terms of magnitude, the number of employed persons 15 years old and over was recorded at 47.67 million in September 2023 from 47.58 million in the same month last year. In August 2023, the number of employed persons was 48.07 million.

The labor force participation rate (LFPR) in September 2023 was posted at 64.1%, which was lower than the 65.2% LFPR in September 2022 and the 64.7 percent LFPR in August 2023.

Similarly, the underemployment rate saw a significant decrease to 10.7% in September 2023, down from the 15.4% posted in September 2022. This decrease is equivalent to 2.2 million fewer underemployed individuals.

National Economic and Development Authority Secretary Arsenio Balisacan reiterated the government’s objective of pursuing high-quality job generation for Filipinos as labor market indicators continue to improve.

“The government is committed to improving the investment climate of the country to attract businesses that generate high-quality employment. We will continue to pursue enhancements to existing policies to address concerns in investments, particularly in infrastructure development in areas outside the National Capital Region,” Balisacan said.

Employment losses were observed in the manufacturing, wholesale and retail trade, and agriculture and forestry. The manufacturing sector lost an estimated 888,000 jobs, the wholesale and retail trade sector

lost 722,000 jobs, while the agriculture and forestry sector lost 649,000 jobs.

Balisacan said adverse weather conditions, along with increased input and borrowing costs, resulted in job losses in the wholesale and retail trade and agriculture sectors.

In addition, the PSA noted a drop in the labor force participation rate (LFPR) among women. The agency reported a female LFPR of 53.4 percent in September 2023, which is lower than the 54.8 percent recorded during the same period last year. Household duties were among the main causes for this decrease.

Balisacan said that the national government will address these issues by building the resilience of the economy.

“In the coming months, the agriculture sector will likely be adversely affected by the strong El Niño. Guided by the El Niño National Action Plan (NAP), the government will implement more programs to develop a more resilient agriculture sector. This will help minimize employment losses in the sector,” he said.

Facilitating digitalization and promoting innovation in business, especially in MSMEs will open up more opportunities for high-quality and high-paying jobs for Filipinos, he said.

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