In June 2023, the Philippines saw a notable decline in its unemployment rate, falling to 3.1% from the previous month's 4.1%. This translates to approximately 1.62 million Filipinos currently without jobs, as reported by the country's statistics agency earlier this Wednesday. This reduction in unemployment figures reflects positive economic trends and a robust recovery from the adverse impacts of the pandemic. However, the data indicates a rise in underemployment rates, climbing to 12.1% in June from 9.9% in May.
Underemployment pertains to individuals who are currently employed but seek additional hours in their existing job, an extra job, or a new job offering more hours. The Philippine Statistics Authority (PSA) offers insights into this vital statistic, which could highlight challenges within the labor market as many workers seek to enhance their income. The overall employment rate in the Philippines for June stands impressively at 96.9%, a rise from the 95.9% recorded in May.
The construction sector has emerged as a significant contributor, exhibiting the highest year-on-year increase in employee count. This sector's growth showcases the ongoing infrastructure investment efforts that the government is endorsing. Several sectors experienced substantial increases in employment, notably the wholesale and retail trade, repair of motor vehicles and motorcycles, and accommodation and food service activities.
These sectors play a crucial role in the Philippine economy and demonstrate resilience in adapting to changing consumer behaviors and market demands. Conversely, certain sectors have faced challenges, including agriculture and forestry, public administration and defense, compulsory social security, and fishing and aquaculture, which witnessed the most significant decline in employment rates.
These changes underscore the varied impact of economic shifts across different industries. Diving into the broader industry performance, the services sector continues to be the largest contributor to the employment landscape, representing 58.7% of the total employment. Following closely is the agriculture sector, contributing 21.1%, while the industry sector accounted for 20.2%.
This distribution highlights the ongoing significance of the services industry in employing the majority of the workforce. The labor force participation rate also gained momentum, growing to 66.0% in June from 64.8% in May. This metric reflects the number of individuals actively engaged in the labor market, indicating more Filipinos are seeking job opportunities and potentially contributing to lower unemployment figures. On average, an employed Filipino worked 40.9 hours a week in June, slightly increasing from 40.6 hours in May.
This uptick suggests that those in employment are getting more hours, which could be indicative of heightened demand for labor in several sectors. Among the employed individuals, wage and salary workers continue to represent the largest share at 63.8%. This is followed by self-employed individuals without paid employees, accounting for 27.0%, and unpaid family workers representing 5%.
These statistics illustrate the employment landscape, showcasing the dominance of formal employment within the workforce. Furthermore, private company employees constitute 51.4% of the total employed population, while government employees account for 8.0%. This distribution reveals an economy heavily reliant on private sector employment, suggesting a vibrant entrepreneurial and business environment. In conclusion, while the reduction in the unemployment rate is encouraging, the rise in underemployment highlights ongoing issues in the labor market.
With the considerable reliance on the services sector and continued growth observed in certain industries, the Philippine economy is poised for further development, although careful attention must be paid to the sectors experiencing decline..