The Employers’ Confederation of the Philippines (Ecop) said it expects the country’s unemployment and underemployment rates to decline steadily after the government allowed certain forms of labor contractualization to continue.
Ecop President Donald G. Dee said the Department of Labor and Employment’s (DOLE) issuance of Department Order (DO) 174 on labor contractualization, often called endo, would allow more Filipinos to have jobs this year.
“The DOLE’s new labor policy, DO 174, is now being implemented, leading to the improvement in jobs statistics. There could be further improvement if the government pushes through with its ‘Build, Build, Build’ program,” Dee told the BusinessMirror.
The Ecop chief made the pronouncement after the National Economic and Development Authority (Neda) and the Philippine Statistics Authority (PSA) released the unemployment data last week.
Based on the April 2017 Labor Force Survey of the PSA, an attached agency of the Neda, the country’s unemployment rate went down to 5.7 percent, from 6.1 percent in April 2016.
Also, underemployment rate, or the proportion of employed people wanting additional work, declined to its lowest rate in over a decade at 16.1 percent in April. This is lower by 962,000 workers, or 12.9 percent, compared with underemployed workers recorded in April 2016, according to the Neda.
Employment in manufacturing increased by 1.6 percent, or by 55,000 workers, while the gain of the agriculture sector was pegged at 1.2 percent.
However, the services sector—which accounts for more than half of the country’s total employment—recorded a net employment loss of 557,000 workers.
In March the DOLE came out with DO 174, which reinforced the regulations of the Labor Code.
Expanding the list of labor contractualization practices considered illegal and increasing the capitalization requirement for employers engaged in contractualization to P5 million, from P3 million, are some of the salient features of DO 174.
The provision enabling an employment contract (with a contractor) to be coterminous with a service contract (with the principal) was also removed.
The new DO only strengthened the definition of “labor-only contracting” and what it covers, but allows other forms of contractual work, such as
when the outsourcing agency has an independent and distinct business from that of the principal.
Ecop said DO 174 is a “tempered compromise” versus the proposal of some labor groups to impose a total ban on contractual work.
Under the Philippine Development Plan 2017-2022, the Duterte administration is targeting to cut unemployment rate to as low as 3 percent by 2022, from the 5.5 percent recorded in 2016.
The government is also seeking to slash underemployment rate in areas outside of the National Capital Region to as low as 16 percent by the end of President Duterte’s term, from the 19.7 percent posted a year ago.