Finance Secretary Benjamin Diokno said over the weekend the improving labor market will drive economic growth in the fourth quarter.
Diokno issued the statement after latest data showed that the October 2022 Labor Force Survey recorded the lowest unemployment rate since 2005 at 4.5 percent. This is remarkably lower than the 7.4 percent outturn a year ago and 5.3 percent in January 2020 or pre-pandemic.
The latest Philippine Statistics Authority figures estimate that 2.2 million individuals were unemployed in October 2022, a 36-percent decline or around 1.3 million fewer unemployed individuals compared to the 3.5 million unemployed in October 2021.
Moreover, the country’s employment rate remains on an uptrend at 95.5 percent, or 47.1 million individuals, from 92.6 percent in the same period last year. Employment growth was mainly contributed by wage and salary workers (7.7 percent), particularly in private establishments (8.8 percent).
“We expect the strong labor market to further boost domestic demand in the last quarter of the year and help us attain our economic growth targets,” Diokno said.
“The economic team has intensified its efforts to maintain a sound macroeconomic environment amid high inflation and other external risks,” he said.
The labor force participation rate also improved to 64.2 percent from 62.6 percent a year ago, which is a 2.0 million increase in individuals resulting in 49.3 million in the labor force.
“Despite headwinds, vibrant economic activity has boosted job generation. Moving forward, the government will continue to improve the environment for business and attract investments that will create more jobs, quality jobs, and green jobs,” Diokno said.
The quality of employment has continued to improve year-on-year. The underemployment rate decreased to 14.2 percent in October 2022, relative to 16.1 percent in the same period a year ago, down to 6.67 million from 7.04 million underemployed persons in October 2021.
The youth unemployment rate, on the other hand, decreased to 11.2 percent from 15.1 percent a year ago, while youth underemployment rate improved to 11.2 percent from 14.6 percent last year.
All major sectors have recovered employment losses from the pandemic, led by services with an 11.8-percent growth, agriculture at 10.2 percent, and industry at 8.1 percent.
Compared to the same month last year, the Industry and Services sectors posted double-digit growth at 10.5 percent and 10.4 percent, respectively. These sectors absorbed 77.5 percent of total employment persons for the month.
Diokno said government efforts to revert the country’s growth trajectory to pre-pandemic levels have been generally effective as shown by continued improvement in labor and employment conditions.
He said the government will continue to implement policies and programs to further improve the quantity and quality of employment in the country, particularly in the agriculture sector, as employment in some sub sectors have not yet returned to pre-pandemic levels.