Joblessness Drops To 10 Percent Nationwide But Worsens In NCR; NEDA Chief Stresses Need For Public Transportation

The Philippines’ unemployment rate declined to 10 percent in July after the government eased the world’s longest and strictest lockdown – but the figure worsened to 15.8 percent in Metro Manila, which accounts for more than one-third of the gross domestic product (GDP).

Acting Socioeconomic Planning Secretary Karl Kendrick Chua said the figures showed that employment “will hinge on how open the economy is” and that “to bounce back from this crisis, we will need to open the economy even more.”

In a virtual press briefing with economic managers on Thursday, Sept. 3, Chua acknowledged the need for the government to improve its capacity to detect, treat and isolate patients and allow a “safe and sufficient number of public transportation” to get people to their workplaces. Because of “low operator turnout,” Chua said only 35.5 percent of Metro Manila’s economy was “effectively open.”

Joblessness nationwide went down from the all-time high of 17.7 percent (a 7.7-point drop) during the middle of the enhanced community quarantine (ECQ) in Luzon in April 2020, according to the results of the Labor Force Survey conducted by the Philippine Statistics Authority (PSA) from July 8 to 31 and made public on Sept. 3.

In terms of numbers, there were 4.57 million unemployed Filipinos in July 2020 – a month after the government lifted the 78-day lockdown – compared to 7.25 million in April 2020.

As for the year-on-year comparison, the unemployment rate for July 2020 was nearly double the 5.4 percent (equivalent to 2.44 million Filipinos) recorded in July 2019.

Among the youth, or persons aged 15 to 24, the unemployment rate was 22.4 percent (1.74 million people) in July 2020. This was better than April 2020’s 31.6-percent rate (2.05 million people) but much worse than July 2019’s 14.7-percent figure (1.12 million).

National Statistician Dennis Claire Mapa, in a virtual press briefing on Sept. 3, said the July 2020 unemployment figures were still the “highest” when compared to the July of previous years up to 2005. Usually, companies would be expected to hire fresh graduates by this time of the year.

Metro Manila the only laggard

Bucking the trend, Metro Manila or the National Capital Region (NCR) registered a worse unemployment rate of 15.8 percent in July 2020, equivalent to 929,000 people.

This was 3.5 points higher than the 12.3 percent logged during the middle of the ECQ in April 2020. Although the NCR is the only region where the situation worsened, it is also the country’s leading economic hub.

The NCR’s neighboring regions of Calabarzon and Central Luzon also registered the highest numbers of unemployed people. Their unemployment rates of 12.4 percent and 10.9 percent were equivalent to 886,000 and 552,000 people, respectively. But these figures were better than those for April 2020.

The other regions that still reported double-digit unemployment rates in July 2020, although vastly improved, were Central Visayas (11.7 percent) and Ilocos region (11.1 percent).

Cebu City, the primary hub of Central Visayas, reverted to ECQ from June 15 to July 15 and to modified ECQ from July 16 to 31. (Metro Manila and neighboring provinces reverted to modified ECQ from Aug. 4 to 18, or only after the PSA conducted its survey.)

The Bangsamoro Autonomous Region in Muslim Mindanao saw the biggest improvement. Its unemployment rate of 3.8 percent was the lowest of any region in July 2020 and was 26 points down from the highest regional rate of 29.8 percent for April 2020.

The PSA’s survey defines “unemployed” persons as those who are without work, are available for work, are seeking work, or are not seeking work because of job unavailability, pending job applications, pending rehiring or temporary disability.

Prior to the pandemic, the worst unemployment rate recorded was for April 1991, when it hit 14.4 percent.

Pollster Social Weather Stations (SWS) reported that a mobile phone survey from July 3 to 6 showed that adult joblessness rose to a record-high 45.5 percent – the highest since March 2012, when a 34.4-percent rate was logged. SWS was not able to conduct its usual March and June survey this year.

For the survey, 1,555 respondents were interviewed. It had sampling error margins of plus or minus two percent for nationwide percentages. SWS defined “adult joblessness” as the percentage of the labor force “without a job at present and looking for a job.”

Employed but cannot go to work

The PSA survey also reported that “underemployed” persons, or those who look for an additional job or seek more work hours to meet their needs, eased a bit to 17.3 percent in July 2020. This was slightly better than the 18.9-percent rate in April 2020, but worse than the 13.6-percent figure in July 2019.

The highest and lowest underemployment rates were recorded in Mimaropa (27.2 percent) and Davao regions (9.2 percent), respectively. The figure was 11.5 percent for the NCR.

Meanwhile, the number of employed workers who were not working dropped sharply by 89.5 percent between April and July this year.

Overall, the total of workers and unemployed persons looking for a job (61.9 million) comprised 61.9 percent of the total population of persons 15 years old and above (74.06 million). This ratio is called the “labor force participation.”

This was an improvement from the record-low 55.6-percent rate registered in April 2020, when fewer people were willing to work or look for a job. Still, it was slightly down from the 62.1-percent figure for July 2019.

When the government imposed a ban on public transportation and most movements in April 2020, 12.97 million people could not go to work. The figure fell to 1.36 million three months later as restrictions were relaxed. Still, the latest number was quadruple the 328,000 figure for July 2019.

Likely a result of being stuck at home, self-employed persons have steadily increased in proportion throughout the pandemic. They comprised 27.1 percent of workers in July 2019, 28.7 percent in April 2020, and finally, 29.3 percent in July 2020.

Meanwhile, workers worked 38.2 hours a week on average in July 2020, more than April 2020’s 35 hours, but less than July 2019’s 41.8 hours.

Industries that recovered and struggled

Also according to the PSA, the mining and quarrying sector led the few industry groups that in July 2020 somewhat recovered or even exceeded the employment figures of July 2019. It posted a year-on-year growth rate of 19.3 percent.

Other sectors that retained or increased employment were agriculture and forestry (17.3 percent), energy and air conditioning (12.2 percent), human health and social work activities (11.0 percent), wholesale and retail trade and motor vehicle repair (4.1 percent) and construction (0.4 percent).

The decent performance of the agriculture, wholesale and retail trade, and construction sectors was significant because of the size of their respective labor forces. Each employed 9.75 million, 8.89 million and 4.03 million in July 2020, respectively. All these sectors lost thousands of jobs in April 2020.

For Chua, the fact that the number of workers exceeded the July 2019 figures afterwards meant that new jobs were being created on top of lost jobs being restored. He described this as a “U-turn” for sectors that “directly benefited from the relaxation of quarantine measures.”

However, the 14 industry groups that struggled outnumbered the seven that performed better.

The arts, entertainment and recreation industry shrank the most in terms of employment; the survey showed a 72.9-percent decrease to roughly 117,000 workers in July 2020, from 433,000 in July 2019. The operations of such businesses were curtailed as they were deemed non-essential, especially under the strictest quarantine classifications.

Of the 21 groups listed by the PSA, the arts, entertainment and recreation industry was the only one that continued to lose workers (41.4 percent) after April 2020. All the other sectors that posted negative year-on-year growth rates were at least in a better shape than in April 2020.

The number of workers in the accommodation and food service sector decreased by 35.9 percent to 1.28 million in July 2020, compared to 2 million the year before. The labor force for the transportation and storage sector shrank by 10.2 percent to 2.91 million workers in July 2020, compared to 3.24 million the year before.

Similarly, the manufacturing sector shed 8.9 percent of its labor force, employing only 3.37 million in July 2020 compared to 3.7 million the year before.

Other hard-hit sectors with terrible year-on-year growth rates were information and communication (-28.8 percent), fishing and aquaculture (-21.2 percent), professional, scientific and technical activities (-19.7 percent), real estate activities (-17.3 percent), and administrative and support services (-11.6 percent).

The country is currently suffering its first recession since 1991 (when the Gulf War crippled the supply of oil) and its worst economic slump since the fall of the Marcos regime in 1986. During the first quarter of 2020, GDP fell by 0.7 percent compared to the same period in 2019; its last three weeks marked the beginning of the lockdown in Luzon. In the second quarter, the year-on-year contraction worsened to 16.5 percent.

Relaxed lockdowns eased joblessness

Government officials directly attributed the slight improvement in unemployment rates to the relaxation of the lockdowns beginning June.

Chua noted that during the first half of July, 2.1 percent of the economy was placed under ECQ while 48.4 percent was under general community quarantine and 49.5 percent under modified GCQ.

This allowed for more economic activity compared to the first half of May, when 78.8 percent was under ECQ and only 21.2 percent was under GCQ.

“These data show that the government has responded to the needs of the people and will continue to do so,” Chua said.

Mapa said: “Of course, may mga regions na nakita na nagbukas na yung mga economic centers kaya nagkaroon na nang pagbalik sa trabaho ang mga kababayan (Of course, there are regions that we saw opened their economic centers, so our compatriots have started going back to work).”

But Mapa noted that the worsening situation in Metro Manila sent “mixed” signals. Even though the government allowed most sectors to resume operations, he noted that many businesses could not reopen as the lack of activity during the 78-day lockdown depleted resources.

Department of Budget and Management Assistant Secretary Rolando Toledo admitted that even the July figures were “much worse than what we are expecting.” Department of Trade and Industry Undersecretary Ceferino Rodolfo added: “Masama pa rin ho ang 10 percent (10 percent was still terrible), but at least it was a drop from 17 percent.”

To continue getting the country out of rock bottom, the officials pushed for the enactment of Bayanihan to Recover as One Act, which President Duterte has yet to sign more than a week after its ratification by Congress.

Of its P140-billion budget, P13.5 billion was allocated for the hiring of health care workers and increasing their benefits, while another P13 billion would go to cash-for-work programs and cash assistance for displaced workers, freelancers, self-employed persons and overseas Filipino workers.

Under the bill, P39.5 billion will be infused into government financial institutions to extend lifelines to struggling businesses, P24 billion will be loaned to farmers, fisherfolk and cooperatives, and P3 billion in assistance will be given to tourism sector workers.

Department of Finance Assistant Secretary Antonio Lambino II also called on Congress to pass the proposed Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, the Financial Institutions Strategic Transfer (FIST) Act, and the Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) Act. He likewise stressed that “the timely passage of our budget is crucial” for 2021.

Chua told reporters that unemployment rates may ease further to six to eight percent next year with the gradual reopening of the economy, even as he admitted that “we know there are some sectors that will not recover as fast as possible.”

Passing the buck to the people

Aside from touting government interventions, Chua harped on the responsibility of individuals to comply with minimum public health standards and keep the economy afloat amid the coronavirus disease 2019 (COVID-19) pandemic.

“This will depend on everyone working together to adhere to health standards, as the government accelerates the implementation of the recovery program,” he said. “The projections are based on what actions we take collectively to address the pandemic.”

Chua even underscored that much of the spread of COVID-19 takes place among family members because “we let our guard down when we get home.” He added: “Around 90 percent, to my understanding, of the outcome is based on your personal actions.”

He said he found it “unlikely to see any spikes as long as we all cooperate” and the government implements its programs “in an accelerated manner.”

At Malacañang, presidential spokesman Harry Roque said the decline in the unemployment rate was “mabuting balita (good news).” He echoed Chua’s emphasis on individual compliance with public health standards.

“Kasi habang ginagawa po natin iyan ay nabubuhay tayo in spite and despite COVID-19. Habang pinag-iingatan natin ang ating buhay ay magkakaroon po tayo ng hanapbuhay. Sana ay patuloy po ito (As long as we do that, we can live in spite and despite COVID-19. While we take care of our lives, we can earn a living. I hope this continues),” he said.

This time, Roque no longer expressed joy, after he drew flak for his earlier response to the 45.5-percent joblessness that emerged in the SWS survey. In an Aug. 17 briefing, he said: “Ako po ay nagagalak na hindi tayo 100-percent nawalan ng trabaho, kasi sa tagal po na naka-lockdown tayo. Talagang I’m still surprised at our resilience at 45 percent pa lang po ang nawawalan ng trabaho (I am happy that we did not 100 percent lose our jobs, because of how long we were on lockdown. I’m really still surprised at our resilience and that only 45 percent have lost their jobs).”

In the same briefing, National Action Plan Against COVID-19 deputy chief implementer Vivencio Dizon said: “Napakaimportante po talaga ang direksyon ng ating mahal na Pangulo na kailangan pong dahan-dahanin na nating buksan ang ating ekonomiya (The direction of our beloved President to slowly open our economy is really important).” He also affirmed the administration’s tack of relying on infrastructure to generate jobs.

Government too conservative?

The Nagkaisa! Labor Coalition said this was not enough improvement. Comparing the latest data with the July 2019 figures, it said “the current level of unemployment remains high as a result of the economic crisis due to the pandemic and the government’s conservative approach to recovery.”

It noted that many companies, especially in special economic zones, have warned about retrenchment or closure in the next few months should global demand fail to pick up.

The coalition called for a “massive employment program” and a “more aggressive stimulus program,” as it found that a recovery “tied mainly to market responses will not be enough” to cut the unemployment rate further by the end of this year.

It found the Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers program, which provides emergency employment in social community projects, infrastructure projects or agro-forestry community projects for only 10 to 30 days, to be insufficient.

Nagkaisa! expressed belief the increase in underemployment also coincided with the increase in self-employment when people were forced to stay home.

“Although workers found employment, the income they earn from work is not enough so they are forced to look for additional work. These trends also imply that many firms have not yet recovered from the economic crisis,” it said.