The country’s' jobless rate slipped to 7.5 percent in April from 7.7 percent in January despite the economy shrinking at fastest pace in two decades in the first three months of the year, data showed yesterday.

However, the underemployment rate – those with jobs but want to work more -- climbed slightly to 18.9 percent in April against 18.2 percent in January.

Analysts said the rise in the underemployment rate pointed to mounting pressures on the labor market, aggravated by returning Filipino workers who lost their jobs overseas due to the global recession.

''There is clearly pressure on the labor market, not just due to economic slowdown, but also going forward with remittance growth showing further downside,'' said Simon Wong, economist at Standard Chartered Bank in Hong Kong.

''As more overseas workers feel pressure to return home, then that will increase pressure on the domestic labor market.''

Jun Trinidad, economist at Citigroup in Manila, said the drop in the unemployment rate was partly due to the 105,000 in additional jobs created in the public sector as a part of the government's
fiscal stimulus package.

Still the Philippines has the second highest jobless rate among the biggest Southeast Asian economies, behind Indonesia which reported an unemployment rate of 8.14 percent as of February.

Thailand's jobless rate was at 1.9 percent in February, below Malaysia's 3.3 percent at end 2008.
Singapore's first quarter seasonally adjusted jobless rate was 3.3 percent, a 3-year high.

Job cuts and reduced work hours in the Philippines have been on the rise, mainly in the electronics sector, which account for over half of the country's exports, with demand still weak.

There were 2.83 million unemployed in the Philippines as of April, slightly lower than 2.86 million in January while the total labor force grew to 37.8 million from 37.1 million in January.

But the underemployed workers climbed to 6.62 million from 6.24 million in the same period. Of the total underemployed, 62.6 percent worked less than 40 hours a week in April, higher than 60.8 percent in January.

''While people seem to be busy, it is not the full 8 hours or 40 hours a week, so that is where the weakness of the recent statistics may come in,'' said Trinidad. ''This suggests that it can still encourage people not to spend.''

Officials said last month the economy's 2.3 percent contraction in the first quarter was partly due to weak personal spending as people saved their money due to the uncertainty on the depth of the global downturn.

At least 6,500 Filipino workers returned from abroad, mainly Taiwan, since October as the global recession hit the manufacturing sector, based on data from the overseas workers welfare agency. (Reuters)