The Department of Finance (DOF) said the significant improvement in the country’s labor market would help soften the impacts of high inflation on the domestic economy.
In a statement, Finance Secretary Benjamin E. Diokno said the steady unemployment rate and lower underemployment rate will help preserve the country’s economic momentum in early 2023.
"This continued improvement in employment conditions will help keep the domestic economy afloat in a high inflation environment,” Diokno said.
Headline inflation accelerated to 8.7 percent in the first month of 2023, surpassing the Bangko Sentral ng Pilipinas' forecast of 7.5 percent to 8.3 percent, and the government’s target range of 2.0 percent to 4.0 percent.
However, the December 2022 Labor Force Survey (LFS) recorded an unemployment rate of 4.3 percent, which is the second lowest since April 2005. This is also significantly lower than the 6.6 percent recorded in December 2021.
The unemployment numbers for December declined by 32.4 percent or 1.06 million unemployed individuals compared to the same month in 2021.
Employment, on the other hand, reached 49 million in December, or an additional 2.7 million employment year-on-year, which Diokno said was a testament to the sustained labor market momentum.
Growth in employment was mainly driven by wage and salary workers––specifically those employed in private establishments, which grew by 8.1 percent or 1.8 million individuals.
The labor force participation rate (LFPR) remained high at 66.4 percent, slightly lower than the 67.5 percent recorded in November 2022, but higher than the 65.1 percent in December 2021.
The year-on-year increase in the LFPR translates to 1.7 million Filipinos joining the labor force.
Likewise, the quality of employment improves with underemployment rate fell to 12.6 percent in December, lower than 14.7 percent in the same period a year ago.
"The steady recovery of our labor market proves that the worst is behind us. The significant improvement in the quality of jobs, in particular, is most promising,” Diokno said.
“This year, we will build on these gains to drive up domestic demand and secure our recovery amid external threats in the global economy," he added.
By major sectors, Services contributed the most to the increase in employment with a growth of 10.1 percent, while Industry grew by 1.8 percent.
The youth unemployment rate decreased to 9.5 percent from 12.9 percent a year ago. Underemployment among the youth also improved to 9.2 percent from 11.3 percent in December 2021.
For full-year 2022, around 2.9 million Filipinos were added to the total employment. The unemployment rate significantly improved to 5.4 percent from 7.8 percent in 2021, while the underemployment rate also declined to 14.2 percent from 15.9 percent in 2021.