Holiday demand lifts job quality in December, but unemployment slightly up

MANILA, Philippines (Updated, 11:03 a.m.) — The proportion of jobless Filipinos slightly increased in December last year, although the quality of available jobs significantly improved during a high-spending season for consumers.

There were 2.22 million Filipinos who are either unemployed or out of business in December, higher than the preceding month’s 2.18 million, the Philippine Statistics Authority reported Wednesday.

That translated to an unemployment rate of 4.3% during the final month of 2022, up from the 4.2% rate recorded in November.

The slight increase in unemployment rate came despite strong consumer demand during the holiday shopping season that typically provides a wealth of seasonal jobs for Filipinos. Speaking to reporters, National Statistician Claire Dennis Mapa said the small jump in unemployment figures was not statistically significant.

Still, a higher jobless rate at a time of elevated inflation could be a problem for the Marcos administration, which has been scrambling to rein in runaway food and energy prices.

READ: No sign yet of peak inflation as January prices sizzle to new 14-year high

But there were good data points that emerged from the latest jobs report. The PSA reported that there were 6.20 million Filipinos who looked for additional in December to augment their income, down from 7.16 million in December.

That’s equivalent to an underemployment rate of 12.6% in December, down from 14.4% in November.

PSA’s Mapa said the holiday rush provided stable work in December, although the better job quality might not be sustainable as robust demand fades.

“The heightened activities during the season actually started last November, resulting in the dramatic reduction of joblessness that month,” Leonardo Lanzona, a labor economist at Ateneo De Manila University, said.

“So we saw a lot of extra, temporary jobs. We are now observing and expecting greater unemployment in the coming months with the waning of holiday season last December and January. This just goes to show that nothing meaningful has happened to ease the plight of the workers,” he added.

Sustaining gains

Data showed that the holiday rush brought a ton of jobs to wholesale and retail trade, repair of motor vehicles and motorcycles (993,000), other service activities (563,000), administrative and support service activities (513,000), accommodation and food service activities (470,000) and transportation and storage (275,000).

Domini Velasquez, chief economist at China Banking Corp., expects the labor market to taper off since the wave of seasonal employment could dissipate in January.

 “In January, we expect slightly worse figures coming off from the holidays, i.e. due to seasonality,” she said.

“However, as the economy continues its vigorous growth in 2023, the labor market will likely remain strong, posting unemployment rates below 5% moving forward,” she added.

Zooming out, full-year data showed that the unemployment rate averaged 5.4%, or 2.67 million Filipinos, in 2022. This was a far cry from the 7.8% average rate recorded in the preceding year, but it drew close to the 5.1% figure tallied in 2019, or before the pandemic.

In terms of underemployment, the data conked out an average rate of 14.2% in 2022. This was equivalent to 6.67 million underemployed Filipinos.

Nicholas Antonio Mapa, senior economist at ING Bank in Manila, said that the latest jobs data was a positive development.

“Hopefully, the strong gains on the job front can be sustained in 2023 amidst the challenges of surging prices and rising borrowing costs,” he said in a Viber message.