Unemployment rate of the Philippines Dropped down to 6.4% in October from 7.1%

2 Million Jobs Created in the Philippines in 1 year period

The country's unemployment rate fell to 6.4 percent in October—the lowest in four years—from 7.1 percent in the same month last year, the National Statistics Office (NSO) reported on Thursday (December 15, 2011).

But despite the employment opportunities created this year, some economists believe these were mostly either temporary work or worse, unpaid family work.

Economists like former Budget Secretary Benjamin Diokno said the numbers themselves were too optimistic, considering that the Philippine economy grew only 3.2 percent in the third quarter.

"How can a decelerating economy create some 2 million jobs? But that's exactly what the Philippine economy did, which grew at 3.2 percent in the third quarter, as unemployment fell from 7.1 percent in October 2010 to 6.4 percent in October 2011," Diokno said.

While it was true that more than a million jobs were created, he said around half a million of these were unpaid family work, which is common in the agriculture sector. Around 956,000 new jobs were in labor and unskilled work.

He also said the average hours worked also declined, while the number of part-time workers significantly increased. Diokno said Filipinos who worked for less than 20 hours a week increased by 1.5 million, while those who worked more than 40 hours increased by 500,000.

"The labor-participation rate rose from 64.2 percent to 66.3 percent, year-on-year. More are looking for a job now than ever before. With hard times, there may be a need for a second or third worker in the family," Diokno said.

But National Economic and Development Authority (NEDA) Director General Cayetano Paderanga Jr. said that even if economic growth was slow this year, it should be taken into consideration that the government has been spending funds on areas that needed them. And this is why it was able to generate more jobs.

Paderanga noted that even if Metro Manila had the highest unemployment rate at 10.4 percent, this was one of the effects of a larger labor force. As the labor force in an area increases, the number of those who do not have jobs also increases.

He also said this is an indication of the amount of economic activity in a given location. This means that many Filipinos from other places continue to migrate to the National Capital Region (NCR) because of the belief that they can participate in more economic activities in the city.

"When an area is growing, it's actually possible that there is bigger unemployment in that area as new migrants collect there. So we also need to consider that as a concern and, at the same time, an indicator that something good is happening in that place. Many of our investments, and this we're trying to correct, have still been concentrated in Metro Manila and Central Luzon," Paderanga said.

The NSO data showed that 38.5 million Filipinos were employed as of October 2011. Those in the services sector comprised 52.1 percent of the total employed population, with those engaged in wholesale and retail trade, repair of motor vehicles, and personal and household goods comprising the largest work force in the services sector.

The second-largest group was in the agriculture sector, which accounted for 33.4 percent of the total employed. The remainder of the total employed was in the industry sector at 14.5 percent.

The National Statistics Office (NSO) said laborers and unskilled workers comprised the largest proportion at 33.2 percent of the total employed population, followed by farmers, forestry workers and fishermen with a 15-percent share.

Meanwhile, the number of underemployed—defined as those who want to work more hours in their present job, to have another job or move to new job with longer working hours—was estimated at 7.4 million in October or an underemployment rate of 19.1 percent. Most of the underemployed were working in the agriculture sector at 41.9 percent and services sector at 41.7 percent.

Among the unemployed, there were more males accounting for 62.6 percent of the total. Almost 50 percent of the unemployed were in age group 15-24 years.