Transcript Understanding the Trends and Patterns in the Philippine Labor Market

TRENDS
& Patterns
Understanding the
In the Philippine Labor Market
24 May 2014
1
Philippine
Statistics
Authority
(1) Serious disconnect
between the structures
of GDP and Employment
 Often results in jobless growth
 Underscores the structural nature of
the unemployment problem
Philippine
Statistics
Authority
2
GDP and Employment Shares by Sector: 2013
Sector
GDP share (%)
Employment share (%)
Agriculture
10.4
31.0
Industry
32.7
15.6
Services
56.8
53.4
Philippine
Statistics
Authority
3
GDP AND EMPLOYMENT : Divergence in growth patterns
Jobless growth: High GDP growth rate but low employment creation (i.e.,
2008, 2012, 2013)
Or the reverse: Low GDP growth rate but high employment creation (i.e.,
2009 - part-time employment in services sector)
Philippine
Statistics
Authority
4
GDP AND EMPLOYMENT, 2013
GROWTH RATE (%)
Sector
Agriculture
Industry
Services
All Sectors
GDP Growth Rate (%)
Employment Growth
Rate (%)
1.1
9.5
7.1
7.2
-2.1
3.4
2.9
1.4
 High GDP growth rate with low employment creation
(jobless growth)
 Structural nature of employment problem
Philippine
Statistics
Authority
5
EMPLOYMENT STRUCTURE
SECTORAL EMPLOYMENT SHARE
(% to total employment)
Selected ASEAN Countries, 2009
Country
Indonesia
Malaysia
Thailand
Philippines
Agriculture
Industry
Services
39.7
13.5
41.5
35.2
18.8
27.0
19.6
14.5
41.5
59.5
38.9
50.3
Source: Norio Usui, Taking the right road to inclusive growth, Asian Development Bank (2012).



6
Share of employment in industry lowest in the Philippines
Robust growth in industry output will not translate to more jobs and lower unemployment –
because of low employment base in industry
For growth to make a dent on unemployment rate – growth should occur in agriculture with
large employment base. But in the long-run the shift in labor resources should occur from
agriculture to industry. This is where right policies and programs can make a difference as
shown by the experiences of neighboring ASEAN countries.
Philippine
Statistics
Authority
OUTPUT STRUCTURE
SECTORAL SHARE
(% to GDP)
Selected ASEAN Countries, 2009
Country
Indonesia
Malaysia
Thailand
Philippines
Agriculture
Industry
Services
15.9
9.5
11.5
12.5
49.6
44.3
43.3
31.5
34.5
46.2
45.2
56.0
Source: Norio Usui, Taking the right road to inclusive growth, Asian Development Bank (2012).

Share of industry output lowest in the Philippines
Philippine
Statistics
Authority
7
GDP PER CAPITA
PPP (at constant 2011 international $)
Selected ASEAN Countries
Country
2000
2005
2012
Indonesia
Malaysia
Thailand
Philippines
5,554
15,688
8,939
4,243
6,513
17,921
10,901
4,804
8,856
21,897
13,586
6,005
Vietnam
Cambodia
Lao,PDR
2,650
1,368
2,327
3,485
1,957
2,930
4,912
2,789
4,388
Source: World Bank, World Development Indicators.
Philippine
Statistics
Authority
8
According to NEDA, it is not unusual for high unemployment even with
economic growth. It is normal, as shown by experiences of other emerging
economies.
As the economy grows and its structure transforms, employment exhibits
volatility as the labor market adjusts---optimism increases among the
working age population resulting to more people looking for work.
Further, in the course of structural change, jobs are destroyed and new
ones are created.
But the current skills of the labor force may not be able to match the
growing and shifting demand for labor.
This may result to increase in unemployment rates at certain points during
the transformation process.
Philippine
Statistics
Authority
9
(2) Economic growth consumption led fuelled by remittances
Share of capital formation stagnant
Share of trade (X-M) negligible
Philippine
Statistics
Authority
10
Gross National Income and Gross Domestic Product by Expenditure Share:
2000, 2005 and 2010 - 2013 (at constant 2000 prices)
Percent distribution
Type of Expenditure
2000
2005
2010
2011
2012
2013
1. Household Final Consumption Expenditure
61.6
58.6
57.6
59.2
59.3
58.2
2. Government consumption
9.7
7.4
8.3
8.3
8.7
8.8
3. Capital Formation
15.7
16.8
17.3
17.1
15.6
17.1
4. Export-Import (X-M)
-1.7
-3.2
0.0
-0.7
0.6
-0.7
Gross Domestic Product
85.3
79.6
83.2
83.9
84.2
83.9
14.7
20.4
16.8
16.1
15.8
16.1
100.0
100.0
100.0
100.0
100.0
100.0
- Net Primary Income from Rest of the
World (ROW)
Gross National Income
Source: Philippine Statistics Authority, National Accounts of the Philippines.
 Consumption - a main growth driver
 Gov’t expenditure on the uptrend
 Capital formation (Investment) the engine growth contributed less than one-fifth
to GNI - its share to GNI erratic
 Export-Import share low or negative – bad for employment
 Share of remittances (net primary income from ROW) erratic– boosting consumption
Danger of too much dependence on remittances
11
Philippine
Statistics
Authority
Annual Growth Rate in Capital Formation, Philippines: 2002 - 2013
(at constant 2000 prices)
40
30
p
20
e
r
c 10
e
n 0
t
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
-10
-20
Source: Philippine Statistics Authority, National Accounts of the Philippines.
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
15.7
-0.4
-2.2
3.0
-15.1
-0.5
23.4
-8.7
31.6
2.0
-3.2
18.2
 Trend in capital formation highly erratic
 Declines occurred in 2003, 2004, 2006, 2009, 2011 and 2012
– this means lack or absence of investment, but significant
upswing in 2013
 No investment >>> lower outputs and fewer jobs
 Foreign direct investment lowest among original ASEAN
12
Philippine
Statistics
Authority
(3) Quality Employment - a
function of GDP growth
Philippine
Statistics
Authority
13
Annual Growth Rates in GDP and Full-time Employment
 Both move in almost identical direction - With few exception e.g.,
2012
 Full-time employment expands in times of economic
upturn/recovery and contracts during economic slowdown
Philippine
Statistics
Authority
14
Annual Growth Rates in GDP and Part-time Employment
 Moved in opposite direction
 Part-time employment expands during economic downturn/slowdown
but decline during economic upturn/recovery
 With few exception e.g., 2008
15
Philippine
Statistics
Authority
(4) Employment grew in
“Boom and Bust Pattern”
• Monsoon economy - - - - - - - > Climate change
• Economic crisis (Asian economic crisis/1988 and global
financial crisis/2008-2009
• Political events
Philippine
Statistics
Authority
16
ANNUAL EMPLOYMENT GROWTH RATE (%)
2007 - 2013
 Employment trend characterized by erratic movement or
“boom and bust”
 May not be observed at all times
Philippine
Statistics
Authority
17
 Boom & Bust - More pronounced year-on-year
Philippine
Statistics
Authority
18
(5) DUALISM IN THE LABOR
MARKET
Formal sector ---------------- Precarious
employment
Informal sector -------------- Vulnerable
employment
Philippine
Statistics
Authority
19
In 2013
FORMAL SECTOR
(Wage and salary)
Private establishment
17.114 million
Precarious employment
Private household
Own family-operated
farm or business
0.127 million
1.969 million
Gov’t/GOCC
Employer
3.037 million
1.272 million
INFORMAL SECTOR
Vulnerable employment
Self-employed
Unpaid family workers
10.668 million
3.930 million
Philippine
Statistics
Authority
20
(6) Climate change and
employment instability
- agriculture, fishery and forestry sector
employment a big drag in employment
growth

El Nino phenomenon (1998, 2000, 2003 & 2005)

Destructive typhoons ( 1998, 2004,2006, 2009, 2012 & 2013)
Philippine
Statistics
Authority
21
Employment instability is often caused by fluctuations in
agriculture, fishery and forestry sector due to extreme
weather (climate change)
- Industry employment is small sector (15.6% of total
employment) to make a dent on employment growth.
Moreover, it has remained stagnant across time.
- Service sector employment (53.4%) is generally stable and
increasing overtime.
- Agricultural sector employment (31%) subject to weather
disturbances: steep/mark decline in recent years (2010,
2012,2013) a throwback of the 1998 and 2000 El Nino years
Philippine
Statistics
Authority
22
ANNUAL EMPLOYMENT INCREMENTS (‘000) BY SECTOR
Philippine
Statistics
Authority
23
ANNUAL EMPLOYMENT GENERATION: 2007 – 2013
(‘000)
Annual employment generation below 1 million - except in 2011
(largely part-time)
Philippine
Statistics
Authority
24
(7) Underemployment
-
more serious than unemployment problem
(1 out of 5 employed is underemployed;
its magnitude is 2x the unemployed)
 Highly correlated with poverty
 Variation most pronounced across
regions (spatial)
Philippine
Statistics
Authority
25
UNDEREMPLOYMENT RATE : 2006 - 2013
(‘000)
• Declining gradually from 2006 to 2010
• Relatively unchanged in the past three years
Philippine
Statistics
Authority
26
REGIONAL STATISTICS ON UNDEREMPLOYMENT: 2013
TOP 5 REGIONS
1. Bicol Region
37.3
2. Caraga
27.1
3. Northern Mindanao
25.7
4. Eastern Visayas
25.1
5. MIMAROPA
23.4
BOTTOM 5 REGIONS
1. NCR
12.1
2. ARMM
12.4
3. Cagayan Valley
12.9
4. Ilocos Region
20.0
5. Central Luzon
14.5
Philippine
Statistics
Authority
27
(8) Unemployment
- structural – little change since 2006
(employment and labor force growing at the
same pace, translates to unemployment rate
unchanged)
- largely a problem of the youth (48.5% of
unemployed in 2013)
Rate more than twice the national rate
- Educated workforce – college graduates at
around one-fifth of the unemployed
Philippine
Statistics
Authority
28
UNEMPLOYMENT RATE: 2006-2013 (%)
 Unemployment rate moving within a very narrow band: 7-7.5%
in 2007-2013
TOTAL UNEMPLOYED PERSON: 2006-2013 (‘000)

Total unemployed persons stagnant at less than three million since 2006
Philippine
Statistics
Authority
29
Annual growth rate (%)
 Employment is barely catching up with the growth in labor force
Unemployment rate (%)
 Unemployment rate stays virtually stagnant.
 UR down when E > LF
 UR up when LF > E
30
Philippine
Statistics
Authority
REGIONAL STATISTICS ON UNEMPLOYMENT: 2013
(in percent)
TOP 5 REGIONS
1. NCR
10.3
2. CALABARZON
9.2
3. Central Luzon
8.7
4. Davao Region
6.9
5. Western Visayas
6.9
BOTTOM 5 REGIONS
1. Cagayan Valley
3.2
2. Zamboanga Peninsula
3.5
3. MIMAROPA
4.1
4. SOCCSKSARGEN
4.4
5. CAR
4.5
Philippine
Statistics
Authority
31
As a general rule, high unemployment is associated with low
underemployment and vice versa
10.3%
UNEMPLOYMENT RATE (%)
2013
8.3%
5.3%
3.2%
R2
3.5%
R9
4.1%
R4-B
4.4%
4.5%
4.6%
R12
CAR
ARMM
R8
5.7%
R10
6.0%
Caraga
6.3%
6.5%
R7
R5
6.9%
6.9%
7.1%
R11
R6
PHIL
8.7%
R1
9.2%
R3
R4-A
NCR
UNDEREMPLOYM ENT RATE (%)
2013
37.3%
27.1%
25.7%
25.1%
23.4%
22.7%
22.7%
21.8%
20.0%
19.3%
17.9%
17.2%
15.1%
R5
Caraga
R10
R8
R4-B
R12
R6
R9
R1
PHIL
R4-A
R11
R7
14.5%
R3
14.1%
CAR
12.9%
12.4%
12.1%
R2
ARMM
NCR
Philippine
Statistics
Authority
32
(9) Flukes in the labor
market
Philippine
Statistics
Authority
33
Flukes (blips) in the labor market
- Underemployment rate surged to 22.8%
million) in July 2012
(+1.470
∞
- Part-time employment shot up by 18.4% (+2.514
million) in April 2012 and dipped by 18.9%
(-3.064 million ) in April 2013
This phenomenon could be a “fluke” or temporary in
nature that needs further validation in the
next survey round - hence any attempt on
conclusion could be premature (not
conclusive).
Philippine
Statistics
Authority
34
(9) Bright spots in the labor
market
- Sustained rise in private establishment employment
Vulnerable employment on the decline


-
Strong growth in industry employment
Philippine
Statistics
Authority
35
(1) Employment in Private Establishments on the Steady Rise
(in percent)
20,000
15,000
(in ‘000)
12,423
12,950.00
13,283.00
2006
2007
2008
15,431.00
17,114.00
14,565.00
16,377.00
13,824.00
2009
2010
2011
2012
2013
10,000
5,000
0
 Employment share of wage workers in private establishments rose
steadily from 38.1% in 2006 to 44.9% in 2013
 This suggests that more jobs are now being created in the
economy by the private sector in recent years
Philippine
Statistics
Authority
36
………….on the back of strong growth in industry employment in recent
years
7
6
5
4
3
2
1
0
-1
-2
-3
2007
2008
2009
Agriculture
37
2010
2011
Industry
2012
2013
Services
Sector
2007
2008
2009
2010
2011
2012
2013
Agriculture
0.9
2.1
0.1
-0.7
2.6
-1.4
-2.1
Industry
2.5
-1.4
0.9
6.0
2.4
3.9
3.4
Services
4.4
2.1
5.4
4.2
3.8
1.9
2.9
Philippine
Statistics
Authority
(2) Proportion of Vulnerable Employment on the Downtrend
•
Declining trend in the proportion of self-employed and unpaid
family workers from 44.5% in 2006 to 38.3% in 2013
•
A measure of vulnerable employment – one of the
employment indicators in the Millennium Development Goals
(MDGs)
Philippine
Statistics
Authority
38
(3) Employment creation in BPO remained robust
Annual Employment Growth rate (%): 2007-2013
8.4
Note the change in in in industry classification of BPO
2007-2011 – Real estate, renting and business activities
2012 – Break in data series
2013 – Administrative and support service activities
39
Philippine
Statistics
Authority
DATA LIMITATIONS
 Short reference period (snapshot or stock of
economically active persons)
 Absence of provincial data
 Data reliability subject to proxy respondents
 Break in the data series due to changes in
reference period, coverage and population
projection benchmark
 Change in definition
unemployment
40
in
April
2005
on
Philippine
Statistics
Authority
SOME GUIDELINES IN USING LFS DATA
1.
Never use the term ”Job” as synonymous to EMPLOYMENT.
The LFS is counting people at work and not number of “jobs”.
2.
Comparison of data should be made on a “year-on-year” basis
not on monthly/“survey round” basis – note: LFS data series
is subject to seasonality.
3.
Never use the term ”Quarter”. The LFS is based
on a “past week” reference period not “QUARTER”.
4.
Always bear in mind the “break” in the LFS data series,
the existing data series covers the period 2006 to present.
5.
Be cautious in comparing LFS with other sources of data.
Philippine
Statistics
Authority
41
Employment:
Persons or individuals at work
- the LFS counts person at work not jobs
- in the LFS, a person can be counted only once regardless of the
number of jobs he/she held
Job:
an activity that a person does for a living
- a set of tasks and duties which are carried out by, or can be
assigned to, one or more person (ILO definition)
- in establishments (payroll –statistics), a person can be counted
several times depending on the number of jobs held
Philippine
Statistics
Authority
42
 The term job is really a misnomer.
- in practice, the generation of job statistics does not exactly involve the
counting of activities or tasks or duties
- counting is tedious and cumbersome
- it does not make sense to do this counting
 The object of measurement in job statistics is the same with
LFS i.e., “person at work” or “employed person”. But the difference lies on
the statistical measurement or manner of counting.
 In the LFS, a worker is counted only once during the reference week
regardless of the jobs held –in accordance with mutually exclusive principle
in the LFS.
 In the job statistics, a worker is counted every time
his/her name
appears in one payroll because he/she holds more than one job or changes
jobs during the reference period.
Philippine
Statistics
Authority
43
THANK YOU!
URL: http://www.psa.gov.ph
Philippine
Statistics
Authority
44