Lack of gainful employment belies govt claims of improving jobs market — IBON

April 13, 2024

by IBON Foundation

Job generation is far below targets and the quality of wage work is declining – these belie the Marcos administration’s claims of an improved labor market. The government’s measures to supposedly generate high-quality work are clearly failing.

Improving jobs market?

The government’s Labor and Employment Plan (LEP) 2023-2028 targeted to generate “over 3 million jobs” for Filipinos which is an average of over 500,000 annually. However, the Philippine Statistics Authority reported just a 154,000 increase in the number of employed persons from 48.8 million in February 2023 to 49 million in February 2024 which is less than one-third (30%) of the implied annual target.

The PSA also reported a decrease in the number of unemployed by 679,000 to 1.8 million from 2.5 million and in underemployed by 210,000 to 6.1 million from 6.3 million. However, job creation is so weak that it is likely that the falling magnitude of unemployment is driven more by Filipinos that have stopped looking for work and are dropping out of the labor force because there are no jobs to be found. The number of those in the labor force fell by 526,000 to 50.7 million from 51.3 million, and the labor force participation rate fell to 64.8% from 66.6% the year before.

By industry, there were substantial job losses in agriculture which is notorious for temporary, irregular and informal work. The number of those employed in agriculture, forestry and fishing dropped by a huge 1.3 million to 10.4 million in February 2024 from 11.8 million last year.

By class of worker, wage and salary workers increased by over 1 million to 30.8 million from 29.8 million. This was mainly due to a 1.7 million increase in private establishment workers.

Looking at hours worked, the number of part-time workers declined by 1.1 million to nearly 16 million in February 2024 from 17.1 million in February 2023, while full-time workers increased by 1.5 million to 32.6 million from 31 million. Those with a job, not at work also went down by 226,000 from 665,000 to 439,000.

The increases in private establishment work and even in full-time work should be qualified though. Wages remain low and many households are struggling to keep themselves afloat especially with the rising cost of living. As of March 2024, the average minimum wage nationwide is just Php440 or a little over one-third (36%) of the Php1,207 average family living wage (FLW) nationwide for a family of five. The NCR has the largest minimum wage of all regions at Php610, but this is barely half (51%) of the Php1,197 FLW. BARMM meanwhile has the worst wage gap where the Php361 minimum wage is not even one-fifth (18%) of the Php2,053 FLW.

In any case, informality in employment is still prevalent. IBON estimates that there are 20.4 million informal workers which is 41.6 % of total employed persons as of February 2024. This is comprised of 2.1 million domestic workers, 13.3 million self-employed and 4.9 million working in family-owned farms and businesses (including 3.8 million unpaid family workers). The number of informal workers could be higher if counting the millions of irregular workers in private establishments.

Lack of gainful employment

Amid low incomes and high prices, many Filipinos are living hand-to-mouth and even falling into poverty. Based on Bangko Sentral ng Pilipinas (BSP) data, IBON estimates that from the first quarter to the fourth quarter of 2023, the number of households without savings increased by 1.2 million to 19.2 million. Meanwhile, there were some 20.6 million or 75% of families rating themselves as poor (48%) or borderline poor (27%) in September 2023, according to the Social Weather Stations (SWS).

The Marcos Jr administration keeps touting that the labor market is improving. But there is a serious disconnect between this government hype and the actual reality of millions of Filipinos. Until now, Filipino workers have yet to see the gains from government’s “people-centered” policies and are still struggling with low-paying and precarious livelihoods.

Looking at employment, wage and poverty figures in their entirety, the so-called gains in the labor market are lackluster and are clearly not translating into gainful employment where Filipinos make enough to live on.

The Marcos administration should heed Filipino workers’ demands for an immediate and substantial wage hike. This will have a multiplier effect with extra income from wage increases being spent locally, which is good for the informal sector and local businesses in the community. More fundamentally, there needs to be a much more determined program for agricultural development and especially for national industrialization building Filipino industries. These are the only ways to achieve sustainable and decent job creation.