The country's unemployment rate slightly increased to 7.3 percent in July 2013 from 7 percent in the same period last year.
Socio-economic Planning Secretary Arsenio Balisacan said the pool of unemployed persons consists largely of young people who lack competency and experience, which are important requirements of firms and key factors for successful entrepreneurship.
Balisacan noted that high school graduates constituted the biggest share of the unemployed at 32.8 percent followed by college graduates with 21.8 percent and college undergraduates at 13.6 percent.
"These figures stressed the importance of intensifying government efforts to make education programs more responsive to the needs of the business sector as well as to encourage entrepreneurship in the country," said Balisacan.
In the latest labor force survey conducted by the National Statistics Office, the number of wage and salary workers decreased by 1.6 percent while the number of unpaid family workers went up by 6.4 percent in July 2013 compared to the same period in 2012.
In terms of hours worked, part-time employment grew faster at 3.9 percent compared to full-time employment, which increased by 0.5 percent in July 2013.
"These suggest to us that recent gains in improving the quality of available employment have yet to take root. Hence, the urgency to ensure that the growth momentum is sustained and supported by strategies that will create the conditions for stable, productive, remunerative, and decent employment," said Balisacan.
The underemployment rate has improved to 19.2 percent in July 2013 from 22.8 percent in the same period last year.
"Even though this decline does not indicate a sustainable downtrend, underemployment decreased across all major industry groups."
Double-digit declines were recorded in the sectors of agriculture by 13.9 percent, industry by 13 percent, and services 15.1 percent.
Underemployment also decreased across all categories of class of workers: Wage and salary workers down by 20.8 percent, own family-operated farms or business by 23.4 percent, unpaid family workers by 10.2 percent, self-employed without any paid employee by 1.3 percent.
Balisacan stressed that employment creation remains a big challenge in the country.
"While positive growth in agriculture employment is encouraging, this was accompanied by employment losses in manufacturing and accommodation and food services activities sectors, which are crucial employment-generating sectors in an emerging economy. This is why it is necessary to accelerate the revival of the manufacturing subsector."
Balisacan said this can be done through well-designed and carefully-targeted interventions in certain sectors of the economy that have the potential to deliver massive employment creation and meaningful growth.
He noted that the manufacturing sector has the highest backward and forward linkages with the other production sectors of the economy.
"Manufacturing is the heaviest user of agricultural output, meaning that growing the sector means increasing demand for agricultural output, which means better business and more gainful work for our farmers and fishermen."
"The government and the private sector working together have already developed industry roadmaps which should be further reviewed and strategically implemented," said Balisacan.
He underscored the urgency in addressing infrastructure gaps particularly in logistics and power.
"The government must relentlessly continue its catalytic role in job creation in the country as pointed out in the current updating of the Philippine Development Plan."
Balisacan said sustaining and improving enabling conditions for the private sector to invest in productive sectors of the economy would help rapidly increase employment opportunities.
"Maintaining a positive sentiment from local investors, entrepreneurs, and households is crucial in building up the confidence of foreign direct investors in the country," he added.