MANILA –With faster and improved quality of economic growth, the Philippine labor market continues to show vibrancy as unemployment and underemployment rates fell in July 2016, according to the National Economic and Development Authority (NEDA).

According to the Philippine Statistics Authority’s Labor Force Survey (LFS) for July 2016, the employment rate rose to 94.6 percent to reach 41.0 million employed. This rate is higher than the results in all of the previous July rounds of the LFS since 2011.

“Our growing economy, which is largely driven by output expansion in the services and industry sectors, has created more and better jobs,” said Socioeconomic Planning Secretary Ernesto M. Pernia.

The services sector remained the top employment contributor with a share of 55.3 percent of the total employed. The industry sector accounted for 17.8 percent of the total employed in July 2016, driven largely by strong growth in manufacturing and construction.

Likewise, unemployment and underemployment rates in the country dropped further to 5.4 percent (from 6.5% last year) and 17.3-percent (from 21% last year) respectively, the lowest rates since 2005.

“The unemployment rate in July 2016, the lowest recorded for all July rounds in the past decade, increases the likelihood of achieving the Philippine Development Plan target of 6.5 to 6.7 percent for 2016,” he added.

Moreover, youth unemployment rate dropped to 13.5 percent in July 2016 from 16.3 percent in the previous year, a record low for all July rounds of the LFS since 2006. Also, the share of inactive youth—those who are neither studying nor employed—dropped to 22.0 percent in July 2016 relative to the 24.8 percent trend since 2011.

“But while this is good news, this still means that there are 4.3 million young Filipinos who are underutilized because their skills are not being enhanced by education, training or employment. Government needs to strengthen its JobStart program, which provides assistance to young Filipinos in finding decent jobs” said Pernia, who is also NEDA Director-General.

Meanwhile, the number of stable wage and salary employment registered at 25.2 million or 61.5 percent of total employed persons in July 2016. Most of these workers, almost 80 percent, work for private establishments.

Furthermore, 31.2 percent of the employed have their own businesses, reflecting a key result of the AmBisyon Natin 2040 survey that many Filipinos want to be entrepreneurs.

According to the Cabinet official, “the increasing trend of quality employment indicators like wage and salaried employment, full time employment, and mean hours of work, suggests the buoyant state of the country’s labor market.”

However, he said that vulnerable employment remains a concern. The proportion of self-employed and unpaid family workers made up over one-third of the total employed.

“The sluggish decline of vulnerable employment could partly explain why poverty reduction is slow. These workers are less likely to have formal work arrangements and access to social protection. They are also more at risk during crises or shocks,” Pernia added.

Thus, he stressed that government needs to focus efforts on helping unutilized or underutilized youth, the unemployed youth, and vulnerable workers.

“Sustainable livelihood and entrepreneurship schemes for vulnerable workers must be developed by intensifying advocacy for financial literacy, linking them to market supply chains, and providing wider access to capital, credit and technology,” said Secretary Pernia.