Accounting Jobs

Economic slowdown swells jobless’ ranks

MANILA, Philippines - With growth slowing due to rising inflation, some 2.9 million Filipinos found themselves jobless in April, the government Tuesday reported.

At 8.0%, the latest unemployment figure is the highest in nearly two years and compares to 7.4% a year earlier.

“[The] unemployment figures released by the National Statistics Office (NSO) … confirmed the weakening economic fundamentals of April 2008,” University of Asia and the Pacific economist Victor A. Abola said.

Economic growth slowed to 5.2% in the first quarter, blamed on high oil prices and a US slowdown, after having expanded by a three-decade high of 7.2% last year.

Mr. Abola called the 8.0% jobless rate a modest rise, “thanks to more jobs in agriculture,” but said the worse news was that the ranks of the unemployed had increased by 17.5%.

A total of 33.54 million Filipinos were employed as of April, lower than the 33.7 million reported in the same month last year.

“This is not good news but this is hardly unexpected with the slowdown in the economy in the first quarter,” economist Ponciano Intal of De La Salle University said.

The government has vowed to create one million jobs annually but has failed to deliver given funding constraints. With growth slowing, it has resorted to subsidies as a means of cushioning the impact of higher food and fuel prices.

Mr. Abola noted that a drop in the participation rate — the percentage of people actually employed or actively looking for work — to 63.2% from 64.5% “masked an unusually low 0.2% increase in the labor force”.

With jobseekers discouraged about work prospects, he said the economy produced a net 168,000 less jobs in the 12 months to April.

The “main culprit”, he said, was a “disappointing but not unexpected” loss of 261,000 jobs in the industrial sector.

A strong peso took its toll on manufacturing, where 183,000 jobs were lost. Mining, often touted as a sunshine industry, also shed 34,000 jobs.

“Agriculture and services were net positive contributors to job creation, but these provided only an additional 0.3% and 0.1% from year-ago figures [respectively]” Mr. Abola said.

As underemployment rose to 19.8% in April from 18.9% a year ago, De La Salle’s Mr. Intal said “With the rising inflation, it is expected that people would want to work more hours to supplement their income and make up for the rise in the prices of commodities.”

Underemployment is defined as accounting for those people who already have jobs but are looking for more work to augment their incomes.

With respect to the participation rate, Mr. Intal said “Perhaps, from the point of view of the potential worker, there is less expectation of good employment so they opted out of the labor force.”

Firms, meanwhile, are likewise cautious about the future as they are not so keen on hiring new people, Mr. Abola said.

“This is reflected in their preference for longer working hours, as the average working hours per week rose by 5%, even as the number of employed people working less than 40 hours per week was fewer by 15%,” he said.

A positive note, Mr. Abola said, is that the “number of salaried workers increased by 2.8%, as the ranks of the self-employed and unpaid family workers dropped by 6.1% and 5.1%, respectively.”

Source: BusinessWorld