Philippine jobless rate falls to 10 percent, giving hope for rebound
MANILA, NNA – The number of unemployed people in the Philippines fell to 10 percent in July from the record high 17.7 percent in April after the economy gradually reopened, according to government data released on Thursday.
Acting socioeconomic planning secretary Karl Kendrick Chua said some 7.5 million jobs were restored by July after lockdowns to contain the spread of the coronavirus pandemic were further eased.
Philippines Statistics Authority (PSA) data shows that 4.6 million of the total workforce of 45.9 million were unemployed in July, down from 7.3 million in April, when movement restrictions were enforced rigorously.
However, the July figures almost doubled that of the same month in 2019 when the jobless rate was recorded at 5.4 percent.
More than 78 percent of the economy was shut down in the first half of May. In July, only 2.1 percent had remained closed.
“These data show that the government has responded to the needs of the people and will continue to do so,” Chua said in an online press briefing.
However, while the jobless rate had declined across the country, joblessness in the capital Metro Manila had remained the highest at 15.8 percent or an equivalent of 929,000 unemployed in July, said national statistician Dennis Mapa.
He noted that Manila and surrounding economic centers continued to suffer double digit unemployment while improving their situation slowly on the whole.
Mapa said the Calabarzon region, south of Manila, has the second biggest number of unemployed with about 886,000 without jobs. The third highest is the Central Luzon region north of Manila, which has 552,000 jobless people.
Higher unemployment in Metro Manila and surrounding provinces reflects the impact of their continued quarantine status, said Chua.
All these places, which continued to be pandemic hotspots, have been placed under a more relaxed quarantine restriction until September 30 by President Rodrigo Duterte on Monday after noting a rise in infections.
Creating more jobs
The sooner the quarantine status is lowered, the faster the country can see the unemployment rate being brought down, said Chua.
If COVID-19 response strategies improve and public transportation opens further, the country can expect to see 2.4 to 2.8 million jobs being added next year, said Chua.
To address the high unemployment caused by the coronavirus crisis, the government has been banking on Duterte's flagship infrastructure 'Build Build Build' program to provide jobs not just to displaced Filipino workers locally, but also those who lost jobs overseas.
The government expects the huge infrastructure projects to generate 1.1 million full-time jobs through 2021.
The government also plans to hire 50,000 contact tracers to combat the spread of the coronavirus in hotspots. It also expects the business process outsourcing sector to hire more workers as some companies in the Philippines are reportedly expanding operations.
Ruben Carlo Asuncion, chief economist at the UnionBank of the Philippines, told NNA he expects unemployment to remain double-digit this year as the country awaits for a Covid-19 vaccine to be delivered.
“At this point, the economy is still suffering from domestic demand shock due to fear of contracting the virus by most consumers and thus affecting production of goods and services as well,” he said.
Nicholas Mapa, chief economist at the Manila office of the ING bank, also expects the unemployment figures to remain high well into 2021.
With GDP numbers expected to be in contraction all the way to the first quarter of 2021, prospects for a quick reversal to the normal 5 percent jobless rate "will remain remote until we see GDP pick up to the 6 percent norm” said Mapa.
But he acknowledged that the improvement in jobs data brings hopes for an economic recovery.
The Philippines, one of Asia's fastest growing economies, fell into a deep recession this year after its second quarter gross domestic product contracted by a record 16.5 percent after strict lockdowns were imposed in April and mid-May.
Chua said the government is hoping that unemployment figures will return to pre-pandemic levels of 4 to 5 percent by 2022.
“We do not expect a U-turn at any time. Our assumption lies on the vaccine being available sometime in the middle or third quarter of next year,” he noted.
The Philippines plans to start clinical trials for a Russian COVID-19 vaccine in October. Duterte, who volunteered to be inoculated, had accepted vaccine offers from Russia and China in hopes that collaboration will boost the country's pharmaceutical industry.