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Monday, October 23, 2017 | MANILA, PHILIPPINES
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   economic indicators

Date posted: Friday, September 16, 2016 | Manila, Philippines

BY Lourdes O. Pilar, Researcher

Hiring rates pick up pace as commodities rally, optimism boost jobs

FIRST-QUARTER employment in Metro Manila rose to its fastest in five years, led by net additions in industry.

According to the Philippine Statistics Authority’s (PSA) latest quarterly report, labor turnover in the National Capital Region (NCR) picked up pace to 0.96% year on year from the 0.53% in the first quarter of last year and the fastest since the 1.96% in the same three months of 2011.

The labor turnover rate is the difference between those hired (accession rate) and those who left or were terminated from their jobs (separation rate). In the first quarter, Metro Manila’s accession rate stood at 7.87% while its separation rate at 6.91%.

Contributing the most to job generation was industry, which recorded a labor turnover rate of 2.54%, as the accession rate of 9.75% outpaced the separation rate of 7.21%.

Driving up Metro Manila’s accession rate were the expansion of hiring in the construction industry and the replacement of more jobs in mining and quarrying.

“The rise in commodity prices led to higher accession rate and lower separation rate in this sector compared with levels recorded in the previous quarter and a year ago,” said Guian Angelo S. Dumalagan, market economist at Land Bank of the Philippines.

“While mining and quarrying companies added only a few expansion-related jobs, they continued to replace separated workers in anticipation perhaps of a further rebound in output prices later this year,” he said.

“The recent report also showed that expansion-related jobs grew much faster in manufacturing and construction, consistent with the robust growth in Philippine industrial production and increased construction activity amid the country’s relatively low interest rate environment,” Mr. Dumalagan added.

In the first quarter of this year, industry’s 9% growth led the 6.8% expansion in the Philippines’ gross domestic product (GDP), which is the amount of final goods and services produced in a country.

Employment growth in Metro Manila’s service sector was flat in the first quarter, while that in agriculture was up 1.18%.

Going forward, higher employment growth can be expected in the second quarter on the back of a surge in net inflows of foreign direct investments last April, said Nicholas Antonio T. Mapa, associate economist at the Bank of Philippine Islands.

“Higher inflows could mean increased job growth due to business expansion. This view is further bolstered by reports indicating that many European and US businesses plan to expand their operations in Southeast Asia, including the Philippines,” he said.

Mr. Mapa said election-related spending boosted profits of firms in the service sector, thus likely resulting in faster employment growth in the second quarter.

A total of 1,232 enterprises participated in the First Quarter 2016 Labor Turnover Survey. The sample was drawn from the 2015 List of Enterprises. The retrieval rate for this quarter was placed at 83.0%.

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