Unemployment seen to decline as trade picks up

After rising in January, the unemployment rate is expected to drop in the next Labor Force Survey to be conducted in April as businesses recuperate from the effects of recent natural calamities, the National Economic and Development Authority (Neda) said.

“We expect the job situation to improve in the second quarter,” Neda Director General Arsenio Balisacan told the Inquirer.

Balisacan, who also serves as socioeconomic planning secretary, said the ongoing construction activities in areas affected by the calamities had provided temporary employment to some people who lost their jobs.

Also, business activities are picking up as the recovery process continues, he added.

“The government’s cash-for-work program is ongoing in the reconstruction sites, and so employment may pick up,” Balisacan said.

Results of the Labor Force Survey held in January showed that the unemployment rate stood at 7.5 percent. This was higher than the 7.1 percent recorded in the same period last year.

Of the 39.41 million members of the country’s labor force in January, about 2.96 million were jobless, data showed.

The worsening of the job situation happened despite the country’s robust economic growth. At 7.2 percent, the Philippines’ economic growth last year was one of the fastest in Asia.

The government said that the rise in the unemployment rate in January was largely due to the strong earthquake that rocked Bohol, Cebu and neighboring provinces in October, and Supertyphoon “Yolanda” that devastated central Philippines in November.

But Balisacan said the impact of the calamities on jobs could have peaked in January and would soon start to ease.

Although it is one of the fastest growing economies in Asia, the Philippines has yet to make its economic growth “inclusive,” according to economists.

Even prior to the two calamities, the country’s robust economic growth so far has failed to significantly reduce the unemployment rate and poverty incidence.

The underemployment rate of 19.5 percent in January and the poverty rate of 25.2 percent in 2012 are one of the highest among emerging Asian economies.

Economists said weak investments in education and infrastructure, as well the tedious process of setting up a business in the Philippines, were some of the reasons why the country failed to make its economic growth more inclusive.

Acknowledging the need to make economic growth more meaningful for the majority of the people, the government has committed to spend more on infrastructure and skills training under the updated medium-term Philippine Development Plan (PDP).

The government aims to increase spending for public infrastructure from less than 3 percent of gross domestic product last year to at least 5 percent by 2016.

The Neda said infrastructure projects, including farm-to-market roads, and skills training would help attract job-generating investments and allow more poor people to secure employment.