The paper examines the Philippine labor market by fitting a labor supply equation using
detailed firm data from the survey of manufactures. The Philippines continues to have
high rates of unemployment and underemployment amidst a continuously rising labor
supply. The results of the econometric effort confirm the description of the economy as
falling within the zone of abundant labor supply at best if not within in the unlimited zone
of labor supply. Segregating the different sizes of firms as individual characteristics does
not change the basic econometric finding. The study further incorporates the effects of
specific industry groupings, of which some were at the 3-digit level of aggregation.
Taking account of specific industry characteristics brings out some unique findings.
Labor intensive export industries and some wage goods industries organized under large
firms tend to be sensitive to movements in the wage rate. But these industry groups are
the exception rather than the rule and the values of the statistically significant aggregate
wage response coefficients are very low values and almost close to zero. The paper
further analyzes the wage differentials among major occupational groups and the nature
of labor supply among professionals and technicians that require the passing of state
administered board examinations. In general, both types of analysis provide additional
confirmation of the excess labor supply at the level of the educated work force.