The country’s unemployment rate declined to 4.4% compared to the same period last year, which stood at 5.3%. Furthermore, this marked an improvement from the preceding month’s rate of 4.8%. <\/p>\n\n\n\n
Concurrently, the underemployment rate exhibited positive progress, decreasing to 11.7% from the previous month’s 14.7%. The totalmcount of unemployed Filipinos in August 2023 was 2.21 million individuals, while the number of underemployed persons reached 5.63 million. The labor force participation rate (LFPR) also showed an upward trajectory, reaching 64.7%, an increase from the 60.1% recorded in July 2023. <\/p>\n\n\n\n
In terms of working hours, the average weekly hours worked in August 2023 stood at 40.8, indicating a modest improvement compared to the average of 42.3 hours in July. The services sector continued to dominate as the top employer in August, representing 3% of the total employed workforce. Additionally, in the broader industry context, the agriculture sector held the top position, accounting for 24.5% of employed individuals.<\/p>\n\n\n\n
Our View: <\/strong>The decline in the unemployment rate is a positive development for the country, which is under a lot of strain due to several economic challenges. One of the significant issues has been the erosion of purchasing power caused by a sharp increase in inflation. <\/p>\n\n\n\n However, a tighter labor market or lower unemployment can also have an impact on inflation. When more people are employed and have disposable income, the overall demand for goods and services can increase. <\/p>\n\n\n\n If this increased demand outpaces the supply of goods and services, it can lead to higher prices, further fueling inflation on the demand side of the economy. This potential for higher inflation due to increased demand will prompt the Bangko Sentral ng Pilipinas (BSP) to raise interest rate.<\/p>\n\n\n\n