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Philippines Table of Contents


Labor Force and Employment

Population growth averaged 2.9 percent from 1965 to 1980 and 2.5 percent in the late 1980s (see Population Growth , ch. 2). While more than 40 percent of the population was below fifteen years of age, the growth of the working-age population--those fifteen years of age and older--was even more rapid than total population growth. In the 1980s, the working-age population grew by 2.7 percent annually. In addition, the labor force participation rate--the proportion of working-age people who were in the labor force--rose approximately 5 percentage points during the 1980s, largely because of the increase in the proportion of women entering the work force. So the actual labor force grew by 750,000 people or approximately 4 percent each year during the 1980s.

Agriculture, which had provided most employment, employed only approximately 45 percent of the work force in 1990, down from 60 percent in 1960. Manufacturing industry was not able to make up the difference. Manufacturing's share of employed people remained stable at about 12 percent in 1990.

The service sector (commerce, finance, transportation, and a host of private and public services), perforce, became the residual employer, accounting for almost 40 percent of the work force in 1988 as contrasted with 25 percent in 1960. Much of this growth was in small-scale enterprises or self-employment activities such as hawking and vending, repair work, transportation, and personal services. Such endeavors are often referred to as the "informal sector," because of the lack of record keeping by its enterprises and a relative freedom from government regulation, monitoring, or reporting. Informal sector occupations were characterized by low productivity, modest fixed assets, long hours of work, and low wages. According to a 1988 study of urban poor in Metro Manila, Cebu, and Davao cities published in the Philippine Economic Journal, more than half of the respondents engaged in informal sector work as their primary income-generating activity.

Unemployment, which had averaged about 4.5 percent during the 1970s, increased drastically following the economic crises of the early 1980s, peaking in early 1989 at 11.4 percent. Urban areas fared worse; unemployment in mid-1990, for example, remained above 15 percent in Metro Manila.

Beyond the unemployment generated from economic mismanagement and crises was a more long-term, structural employment problem, a consequence of the highly concentrated control of productive assets and the inadequate number of work places created by investment in the industrial economy. The size and growth of the service sector was one indicator. Underemployment was another.

Underemployment has been predominantly a problem for poor, less educated, and older people. The unemployed have tended to be young, inexperienced entrants into the labor force, who were relatively well educated and not heads of households. In the first half of the 1980s, approximately 20 percent of male household heads and 35 percent of female household heads were unable to find more than forty days of work a quarter.

Overseas migration absorbed a significant amount of Philippine labor. From the late 1940s through the 1970s, migrants were largely Filipino members of the United States armed services, professionals, and relatives of those who had previously migrated. After liberalization of the United States Immigration and Nationality Act in October 1965, the number of United States immigrant visas issued to Filipinos increased dramatically from approximately 2,500 in 1965 to more than 25,000 in 1970. Most of those emigrating were professionals and their families. By 1990 Filipino-Americans numbered 1.4 million, making them the largest Asian community in the United States.

In the 1970s and 1980s, quite a different flow of migration developed: most emigrants were workers engaged in contract work in the Middle East and, to a lesser extent, elsewhere. Although some were professionals, the majority were production, construction, and transport and equipment workers or operators, as well as service workers. An increasing number also were merchant seamen. Inasmuch as wages paid for overseas contract work have been a multiple of what Filipinos could earn at home, such employment opportunities have been in great demand. Government statistics show that overseas placements of land-based workers increased from 12,500 in 1975 to 385,000 in 1988, a growth rate of about 30 percent per annum. The number of seamen also increased, from 23,500 in 1975, to almost 86,000 in 1988. The average stay abroad was 3.1 years for land-based workers and 6.3 years for seamen.

In 1982 the Philippine Overseas Employment Administration was established in the Ministry of Labor and Employment. The Philippine Overseas Employment Administration consolidated responsibility for regulating overseas land-based workers and seamen, supervising recruitment, as well as adjudicating complaints and conflicts. The agency also was tasked with promoting employment opportunities abroad for Filipinos. Overseas employment created two benefits for the economy: jobs and foreign exchange. The total number of placements abroad from 1980 through 1988, 3.2 million, was about one-half the growth in the country's labor supply during that period. Remittances through the banking system for the period 1983 to 1988 totaled approximately US$4.6 billion, an amount equal to 14 percent of merchandise exports during the same period. The Central Bank estimated that remittances passing through "informal channels" might be as much as twice the documented figure. If so, export of labor would be the largest single earner of foreign exchange.

Data as of June 1991

Country Listing

Philippines Table of Contents