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Peso drops as US jobs data show continued recovery

THE PESO weakened against the dollar on Monday as jobs data out of the United States last week pointed to a continued recovery in the world’s largest economy.

The local unit closed at P48.67 against the greenback on Monday, down five centavos from its P48.62-per-dollar finish on Friday, data from the Bankers Association of the Philippines showed.

The peso opened Monday’s session at P48.58 per dollar and reached an intraday high of P48.555. Meanwhile, it closed at its lowest point for the day.

Dollars traded climbed to $765.80 million on Monday from the $689.60 million logged on Friday.

A trader said the peso dropped versus the dollar as the US recorded a higher employment rate in August.

“The peso weakened following the release of upbeat US jobs report for August… last Friday,” the trader said in an e-mail.

US employment growth slowed further in August and permanent job losses increased as money from the government started running out, raising doubts on the sustainability of the economy’s recovery from the deep COVID-19 recession, Reuters reported.

Nearly a fifth of the job gains reported by the US Labor department on Friday were from the government’s temporary hiring for the 2020 Census. While the unemployment rate fell below 10%, it was biased down by a continuing misclassification problem.

Non-farm payrolls increased by 1.371 million jobs last month after advancing 1.734 million in July. Government employment rose 344,000, with 238,000 temporary workers hired for the decennial census.

Excluding government, payrolls rose 1.027 million. Private sector employment gains were led by the retail sector, with 249,000 jobs created. Though professional and business services added 197,000 jobs, more than half of the gain was in temporary help services, reflecting the uncertain economic environment.

Employment in leisure and hospitality increased by 174,000 jobs, but hiring has stepped down from June and July when 2.0 million and 621,000 jobs were added respectively. Manufacturing employment rose 29,000 and construction added 16,000 jobs.

Meanwhile, Rizal Commercial Banking Corp. (RCBC) Chief Economist Michael L. Ricafort said the peso weakened as the country recorded the smallest surplus in its balance of payments (BoP) in July.

The country posted an $8-million BoP surplus in July, the smallest in more than seven years, amid a surge of inflows from foreign borrowings of the National Government to fund its coronavirus pandemic response, data released by the Bangko Sentral ng Pilipinas on Friday showed.

The July figure was lower than the $248-million surplus in July last year and the $80-million surfeit in June. The BoP position has been in surplus for four straight months.

The central bank expects the overall BoP position to post a surplus of $600 million by yearend, which is equivalent to 0.2% of gross domestic product.

For today, the trader expects the local currency to range from P48.50 to P48.70 versus the dollar while Mr. Ricafort sees the peso moving within P48.60 to P48.75. — KKTJ with Reuters

Halal industry proposed as avenue for boosting trade

THE Philippine Chamber of Commerce and Industry (PCCI) is seeking closer business relationships with its counterparts in neighbors like Malaysia to develop the domestic halal industry, touting such cooperation as a possible driver of the economic recovery.

“It is critical at this point that we maximize our relationships with our counterparts in other countries, especially our neighbors so that we can underpin our economic recovery with a robust and mutually beneficial business and economic partnership in the region,” PCCI President Benedicto V. Yujuico said in an online consultation with its Mindanao chambers Monday.

He said the agriculture sector offers opportunities in developing a domestic halal industry.

“With close cooperation with Malaysia, we may be able to penetrate the global market, which is estimated to be in the billions of dollars and the business and economic benefits this can bring will go beyond the borders of Mindanao as opportunities for MSMEs (micro, small, and medium-sized enterprises) in other parts of the country can be generated as well.”

Romeo M. Montenegro, deputy executive director of the Mindanao Development Authority, said that the country can continue to participate in sub-regional trade.

He said BIMP-EAGA (Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area) ultimately connects the Philippines to the Middle Eastern and other global markets.

“What can be value added? What can be complemented in terms of our products by our neighbors and directed towards the bigger market?” he said.

He added that Mindanao must focus on developing farm-to-market roads, bridges, and highways to connect production areas to export gateways.

While Malaysia continues to ban the entry of foreigners from countries with high COVID-19 (coronavirus disease 2019) cases, BIMP-EAGA Malaysian Business Council Chairman Datuk Roselan Johar Mohamed in the same online event said that their country chooses to focus on maintaining its health standards.

“Only when one is healthy can we go to pursue our economic prosperity,” he said. “Please do not get emotional over this decision. It is for our own good.” — Jenina P. Ibañez

Customs unit monitoring high-risk container shipments reorganized

THE Bureau of Customs (BoC) said it established the Port Control Office (PCO), which is tasked with identifying and examining shipments deemed high risk for smuggled goods.

Customs Commissioner Rey Leonardo B. Guerrero issued Customs Memorandum Order 19-2020 to lay down the rules underlying the Container Control Program (CCP), which also establishes the CCP and the PCO. The order took effect on Sept. 1.

The CMO effectively renames the Container Control Unit of the Container Control divisions at the various ports and transfers their control and supervision to the Deputy Commissioner for Intelligence Group.

“To pursue its objective, the Bureau undertakes to strengthen the PCO by conducting training under the CCP in modern risk management and profiling techniques in order to profile, identify, select and examine high-risk containers likely to contain illicit goods,” according to the CMO.

The profiling will be applied to both imports and exports as well as transit and transshipment goods. The organization is tasked with detecting weapons of mass destruction, strategic trade goods, illegal drugs, precursor chemicals, goods that violate intellectual property rights, and environmental or other non-fiscal offenses such as those involving cultural property, among others.

The unit will also have access to the automated Customs system to help compile its risk analysis. The PCO can also look into other platforms and maritime tracking systems to distinguish between low and high-risk shipments.

Its officers are authorized to seek information from banks and other private firms, subject to the limits of current existing laws, as well as law enforcement agencies and their international Customs counterparts.

In 2016, the Philippines joined the United Nations Office on Drugs and Crime (UNODC)-World Customs Organization’s CCP launched in 2004. The program, through the establishment of PCOs, is the global response to crime and security threats found in the maritime shipment of illegal goods. — Beatrice M. Laforga

E-gov’t shift not happening fast enough — think tank

THE adoption of e-government systems has been “incremental” with the pandemic exposing areas still untouched by the digital shift, such as cash aid distribution, a government think tank said.

In a statement Monday, the Philippine Institute for Development Studies (PIDS) said its upcoming discussion paper, “Innovating Governance: Building Resilience Against COVID-19 Pandemic and Other Risks,” will highlight the importance of accelerating e-government to deal with crises.

“As the government intensifies its response to the COVID-19 pandemic, well-designed e-government platforms are crucial to ensure the efficient and timely delivery of public services,” PIDS said.

However, “the application of e-government solutions has remained incremental” according to the paper’s authors, Aubrey D. Tabuga, Sonny N. Domingo, Charlotte Justine Diokno-Sicat, and Valerie Gilbert T. Ulep, PIDS researchers.

PIDS cited the physical distribution of cash aid during the lockdown as an example of a process that could have been facilitated by digital tools like an up-to-date beneficiary database or direct deposit. The system also lacked a real-time monitoring system, they said.

Obstacles to achieving efficient e-government include the digital divide, or the lack of access by large segments of the population to computers and other devices.

“Outdated laws and policies, overlapping functions of authorities can (also) hinder the implementation of e-government initiatives,” the authors added, noting that the “complex laws and regulations” may result in higher cost of collaboration for government agencies.

The lack of information technology infrastructure also poses a challenge in establishing an e-government system.

“Among the gaps identified in this area include the lack of technological skills among leaders, employees, citizens, and vulnerable population; lack of qualified IT developers or managers; lack of interoperability or lack of shared standards and compatible infrastructure across government agencies; and lack of hardware,” it said.

The Philippines slipped in the E-Government Development Index report of the United Nations (UN) issued in July, placing 77th from 75th in 2018, out of the 193 UN member states.

PIDS cited as possible models for e-government Canada and Estonia.

“The Philippines can draw lessons from these e-government models to be able to improve its ICT system. One such lesson is to adopt a policy with a uniform set of guiding principles and standards. Another is to address the causes of the digital divide.” — Beatrice M. Laforga

Digital payments for business purposes gaining traction 

Filipinos are more inclined to use digital payments for business purchases amid a broader shift to that payment channel due to the coronavirus disease 2019 (COVID-19) pandemic, according to Visa, Inc.

“They are making purchases for business services, showing a shift in small business owners making eCommerce purchases for business related services,” Visa Country Manager for the Philippines and Guam Dan Wolbert said in an e-mail to BusinessWorld.

Mr. Wolbert said this trend is likely to remain as Filipinos come to terms with the convenience of digital payments for such purchases.

In terms of personal transactions, Mr. Wolbert said one out of four active Visa cardholders that did not shop online last year made digital purchases in the first half of the year, pointing to a pandemic-driven shift in buying habits.

“Top categories that Filipino Visa cardholders were purchasing include groceries, drugs and pharmaceutical goods and making bill payments for telecommunication services,” he said.

Mr. Wolbert said digital payments will remain a preferred option as consumers minimize physical contact while making purchases.

“We think that there will be a bigger focus on health and sanitation even after the pandemic,” he said.

Mr. Wolbert also cited a recent study from Visa indicating 70% of Filipinos have said they plan to stick to cashless payments even after COVID-19 and 73% said they expect to continue or increase their online spending as well when things normalize.

The Visa study also found that 42% of Filipinos prefer to pay using cards and mobile apps rather than cash.

The central bank hopes to bring the share of digital payments to 50% of all transactions by 2023.

E-payments comprised 10% of total transactions in 2018 by terms of volume from 1% in 2013, according to a report from the United Nations-backed Better than Cash Alliance. By value, digital transactions accounted for 20% of the total, rising from 8% in 2013. — Luz Wendy T. Noble

Expedited ERC applications to unlock pending investments

THE Energy Regulation Commission (ERC) said expediting the approvals process for power projects is expected to unlock about P200 billion worth of project proposals currently pending.

The commission said at its budget hearing before the House appropriations committee that it wants more personnel to process the applications. However, its proposed budget for personnel services was slashed to P256 million.

ERC Chairperson Agnes VST Devanadera told the committee she hopes the cuts are reconsidered.

“ERC will be able to deliver P200 billion worth of investments by accelerating the processing of applications, and thereby putting into the mainstream of our national economy what is pending with the ERC,” she testified Monday.

The commission had requested P450 million for its personnel services budget next year from P247.04 million this year.

The commission is looking to hire more employees next year to get more work done, ERC Commissioner Floresinda B. Digal said in a Viber message.

Overall, the Budget department is proposing an allocation of P564.88 million for the ERC in 2021, a 48% difference from its proposed budget. Ms. Devanadera said the cut will have a “direct impact” on its approvals process.

The House of Representatives is currently deliberating the government’s P4.5-trillion budget plan for 2021. Speaker Alan Peter S. Cayetano is looking to pass the proposed budget as early as October. — Adam J. Ang

PHL partially lifts ban on Brazilian poultry imports

THE PHILIPPINES has partially lifted a ban on poultry imports from Brazil in the form of mechanically-deboned meat (MDM).

In a memorandum order Monday, Agriculture Secretary William D. Dar said poultry MDM from Brazil is now allowed after Brazilian authorities submitted documents detailing measures taken to prevent the meat from being infected with coronavirus disease 2019 (COVID-19).

Mr. Dar said that Brazilian authorities also submitted assurances on infection control and occupational safety and health procedures at its poultry plants.

The DA said only foreign meat plants with zero cases of COVID-19 infection among workers will be allowed to export MDM to the Philippines.

Further, such imports must have additional documentation in the veterinary health certificate and must have a safe handling label.

“All shipments into the country not complying with the conditions shall be confiscated by DA Veterinary Quarantine Officers/Inspectors at all major ports of entry,” according to the memorandum order.

In a statement, the Philippine Association of Meat Processors, Inc. (PAMPI) said it welcomed the lifting of the ban.

PAMPI President Felix O. Tiukinhoy, Jr. said the industry can now arrange contracts with its suppliers in Brazil.

“We recognize that the ban was lifted because the DA and the Brazil Ministry of Agriculture worked together to address issues related to food safety in the midst of COVID-19 pandemic engulfing Brazil,” Mr. Tiukinhoy said.

The ban was imposed on Aug. 14 after China claimed to have found traces of COVID-19 in chicken from Brazil.

Brazil accounts for nearly 20% of Philippine poultry meat imports. — Revin Mikhael D. Ochave

Revised BIR rules on fair market value of unlisted shares

For foreign and domestic investors, selling shares in Philippine companies have always been fraught with difficulty and uncertainty. In the past, the most complex issue has been the determination of the fair market value of the shares to be sold. The rules created various complications and requirements that sellers and buyers had to be aware of before even considering the transaction. Hence, any move to simplify the process is certainly a welcome development. One of these new developments is Revenue Regulations 20-2020 (RR 20-20) published on Aug. 19. The revenue regulations make the determination of fair market value relatively easier for shareholders selling shares.

BRIEF REFRESHER ON CAPITAL GAINS TAX OF UNLISTED SHARES
Several provisions in the Tax Code provide for capital gains tax (CGT) on the sale, barter, exchange, or other disposition of shares of stock not listed and exchanged in the stock exchange, or “unlisted shares.” The percentage of the tax rate varies by the kind of taxpayer. For individual taxpayers, both resident and non-resident, and domestic corporations, the CGT is at 15%. For foreign corporations, for gains not over P100,000, the rate is 5% while any amount in excess of P100,000 shall be at the rate of 10%.

The tax is imposed on the net capital gain derived from the sale. Gains or losses from the sale are determined by deducting the seller’s cost basis for the shares sold or disposed plus expenses of sale/disposition, if any, from the amount of consideration contracted to be paid.

Under current rules, the selling price cannot be lower than the fair market value of the shares sold. Otherwise, the difference may be subject to donor’s tax under certain circumstances. Hence, prior to agreeing on the selling price, the seller and buyer must establish the fair market value of the shares.

SUMMARY OF THE RULES UNDER RR 20-20
Prior to RR 20-2020, the BIR required the use of the “Adjusted Net Asset Method” in determining the fair market value of the unlisted shares pursuant to Revenue Regulations 06-2013. This means that all assets and liabilities are adjusted to fair market value. The net of adjusted assets minus the liability values is the indicated value of the equity.

If the company whose shares are being sold owns real property, these must be appraised and the higher value among the (a) zonal value, (b) assessed value, (c) fair market value as determined by an independent appraiser, shall be used to arrive at the adjusted net asset value of the company.

In RR 20-2020, the BIR removed the use of the adjusted net asset value. The prima facie fair market values of unlisted shares shall now be the book value based on the latest available financial statements duly certified by an independent public accountant prior to the date of sale, but not earlier than the immediately preceding taxable year.

For preferred shares of stock, the book value shall be based on the liquidation value. Liquidation value is equal to the redemption price of the preferred shares as of the balance sheet date nearest to the transaction date including any premium and cumulative preferred dividends in arrears.

In cases where the unlisted shares sold are both common and preferred shares, liquidation value of the preferred shares shall first be deducted from the total equity of the corporation. The remaining equity shall be divided by the total number of outstanding common shares to arrive at the book value per common share.

INTERIM AUDITED FINANCIAL STATEMENTS
The rule in RR 20-2020 requires the “latest available financial statement duly certified by an independent public accountant prior to the date of sale.” The phrase “prior to the date of the sale” is very important as it precludes the BIR from using audited financial statements after the date of sale.

In the case of CIR v. Sara Lee Kiwi Holdings, LLC, CTA Case No. 8741 (Feb. 13, 2017), the CTA (and later on affirmed by the Supreme Court) upheld the use of audited financial statements for fiscal year ending June 30, 2011 in determining the fair market value of shares sold on April 4, 2011. The same is true in DoF Opinion 008-19 (June 10, 2019) in which the DoF upheld the use of audited financial statements ended Dec. 31, 2015, for a sale that happened on Nov. 26, 2015.

With the latest rule that latest audited financial statement prior to the date of sale must be used, taxpayers can rely on a fixed amount at the time of sale instead of having to adjust or amend CGT returns later on when the audited financial statements become available.

However, the rules do not clarify if the taxpayer may use interim financial statements as long as they are audited by an independent public accountant to determine the fair market value of unlisted shares.

Prior to 2008, taxpayers may use a value other than the book value from the latest audited financial statements. In the old Revenue Regulations 02-82, a taxpayer may adopt a fair market value lower than book value provided a justification for the deviation from the book value is properly supported. Assuming that substantial business reverses or losses are suffered in the interim, may taxpayers present an interim audited financial statement instead of the year-end audited financial statements? Considering that the book value per latest audited financial statements is only prima facie fair market value, the taxpayers should be allowed to support a value lower than that derived from the year-end audited financial statements. Hopefully, the BIR can clarify this issue in subsequent regulations.

DONOR’S TAX INSTEAD OF CAPITAL GAINS TAX?
The amendment of the Tax Code by the TRAIN Law changed the donor’s tax rate to 6% which is a far cry from the 15% or 5-10% CGT tax rate. Under RR 06-08, in the event that the fair market value of the unlisted shares is greater than the amount of money received, then the excess shall be deemed as a gift subject to donor’s tax.

Thus, a question arises on whether it would be better for the taxpayer to sell at a “loss” and pay the 6% donor’s tax rather than the CGT. In some cases, particularly if the cost basis for the shares is minimal, the tax payable under donor’s tax may be substantially lower than the CGT. This is a matter that should be looked into by BIR as it paves the way for unscrupulous taxpayers to disregard the fair market value of unlisted shares for them to pay the lower donor’s tax rate.

Further, Section 100 of the Tax Code imposing donor’s tax on sales with inadequate consideration has been amended by the TRAIN Law. Under the amended provision and implemented by Revenue Memorandum Circular No. 30-2019, a bona fide sale made in the ordinary course of business, at arm’s length, and free from any donative intent, is no longer subject to donor’s tax even if the selling price is lower than the established fair market value.

Given the changes in the rules removing the adjusted net asset value for determining fair market value of unlisted shares, taxpayers can now look forward to easier and simplified steps in processing their sales of unlisted shares. Although there are still some unresolved issues, at least the burden has been lightened and taxpayers can look forward to more transactions in the future.

Let’s Talk Tax is a weekly newspaper column of P&A Grant Thornton that aims to keep the public informed of various developments in taxation. This article is not intended to be a substitute for competent professional advice.

 

John Patrick L. Paumig is an associate from the Tax Advisory & Compliance division of P&A Grant Thornton, the Philippine member firm of Grant Thornton International Ltd.

pagrantthornton@ph.gt.com

Gov’t cites curve flattening as coronavirus cases top 238,000

By Vann Marlo M. Villegas and Gillian M. Cortez, Reporters

LOCAL coronavirus infections have slowed, according to the chief enforcer of the government’s anti-virus efforts.

The curve has flattened, while the country’s healthcare system has improved, national task force chief implementer Carlito G. Galvez, Jr. told an online news briefing on Monday, citing a study by researchers from the University of the Philippines (UP).

The virus reproductive rate stood at 0.94 from four in March, meaning an infected patient can infect one more person, he said.

“This is good news because it means our efforts against the pandemic have borne fruit,” Mr. Galvez said in Filipino.

“But this positive development did not happen overnight,” he said, adding that it was the result of planning by the national and local governments, private sector, medical frontliners and the public.

The Department of Health (DoH) reported 1,383 coronavirus infections on Monday, bringing the total to 238,727.

The death toll rose by 15 to 3,890 while recoveries increased by 230 to 184,906, it said in a bulletin.

There were 49,931 active cases, 88.3% of which were mild, 8.3% did not show symptoms, 1.4% were severe and 2% were critical.

Of the new cases 525 came from Metro Manila, 137 from Laguna, 99 from Batangas, 77 from Negros Occidental and 69 from Cavite.

Eleven of the new deaths came from Metro Manila, two from Western Visayas, and one each from Eastern Visayas and the Calabarzon region, the agency said.

The death rate was at 1.63%, lower than the 3.23% global rate, while the infection rate was at 10.61%, which is higher than the World Health Organization’s (WHO) less than 5% benchmark.

Mr. Galvez said new cases peaked on Aug. 10 with 6,958 and gradually decreased to 2,592 on Sept. 5. There was also a downtrend in Metro Manila, the Calabarzon region and Central Visayas, he said.

There were now 117 licensed laboratories that have conducted 2.7 million tests involving 2.6 million people.

Mr. Galvez urged the public to continue practicing minimum health standards by wearing face masks and shields, washing hands and practicing social distancing to prevent local transmission.

Defense Secretary Delfin Lorenzana, the head of the national task force, on Saturday said the Philippines was seeking to flatten the curve by the end of September.

In epidemiology, the idea of slowing a virus spread so that fewer people need to seek treatment at a time is known as flattening the curve.

The curve researchers are talking about refers to the projected number of people who will get infected over time.

People should not be complacent to sustain the progress, presidential spokesman Harry L. Roque told a separate briefing on Monday.

He traced the curve flattening to President Rodrigo R. Duterte’s decision to put Metro Manila back under a two-week modified strict quarantine last month.

Metro Manila, Batangas, Bulacan, Tacloban, and Bacolod are under a general community quarantine, while the rest of the country is under a more lax modified general community quarantine. Iligan City is the sole area in the country that is under a modified enhanced community quarantine.

Duterte pardons US marine convicted for sex worker’s killing

President Rodrigo R. Duterte has pardoned a US marine whom a Philippine court convicted in 2015 for killing a transgender Filipino sex worker in a case that had ignited anti-American sentiment in the former US colony.

Joseph Scott Pemberton, whose release for good conduct was held by prison officials after an appeal by his victim’s family, had been given the absolute pardon, Foreign Affairs Secretary Teodoro M. Locsin, Jr. tweeted on Monday.

“Cutting matters short over what constitutes time served, and since where he was detained was not in the prisoner’s control — and to do justice — the President has granted an absolute pardon to Pemberton,” he said from the presidential palace.

An Olongapo trial court convicted Mr. Pemberton for homicide in 2015, sentencing him to six to 10 years in jail.

Mr. Pemberton could have faced a life sentence had the judge granted prosecutors’ request for a murder conviction. The court cited mitigating circumstances, saying Mr. Pemberton was drunk and got confused after discovering that the person he had hired for sex was male.

Jeffrey Laude, a 26-year-old male sex worker who identified as a woman, was found strangled in October 2014 in a motel.

“That means Pemberton can go free now,” presidential spokesman Harry L. Roque told GMA News in Filipino, according to a recording of the interview shared by the media network on Viber.

“The President did not erase Pemberton’s conviction,” he said. “He is still a killer but the President has erased his punishment.”

Mr. Duterte said he pardoned the American soldier because he had been treated unfairly.

In a televised speech on Monday night, the President said he had consulted Justice Secretary Menardo I. Guevarra and Executive Secretary Salvador C. Medialdea about the pardon.

The court last week ordered Mr. Pemberton’s release for good conduct. The Justice department earlier said the American soldier would remain detained pending the appeal of the victim’s family.

Mr. Guevarra had said the agency would separately appeal Mr. Pemberton’s release this week. — Gillian M. Cortez

Coast Guard to help secure train stations after blasts in Jolo

THE TRANSPORTATION department has ordered the Philippine Coast Guard to help secure the country’s rail facilities after twin blasts in Jolo in Southern Philippines killed 14 people and wounded at least 75 others.

The Coast Guard will deploy 40 K9 units at stations and facilities of the Light Rail Transit Lines 1 and 2, Metro Rail Transit (MRT) Line 3 and Philippine National Railways to augment security forces,Transportation Secretary Arthur Tugade said in a statement on Monday.

“It is vital that we protect passengers from the threat of terrorism, even as we try to maintain public transportation operations amid the pandemic,” he said. “This is where the expertise and training of the PCG K9 units will prove most effective.”

The K9 units will consist of K9 handlers, working dogs, veterinarians and bomb specialists.

“Dogs to be deployed with the PCG K9 units are highly trained to detect explosives,” the agency said.

“The PCG K9 teams are ready to assist the security forces of these rail lines to deter and/or neutralize threats through higher visibility, enhanced response time, and to make the commuter riding experience more secure,” Coast Guard Commandant Admiral George V. Ursabia, Jr. said in the same statement.

Philippine police have ordered the deployment of a Special Action Force battalion to help local security forces hunt down the bombers, believed to be linked to the Islamic State. — Arjay L. Balinbin

More than 190,000 workers displaced by COVID-19 crisis

More than 190,000 workers from 10,177 businesses have been displaced by the coronavirus pandemic, the Labor department said in its latest report.

The agency said 89% of the workers came from companies that cut their workforce, while the rest lost their jobs because of permanent closures.

It said 41, 560 displaced workers came from the administrative and support service sector. Other industry groups affected were manufacturing with 25,621, other service activities with 24,454, accomodation and food service activities with 18,419, and information and communications with 13,822.

The agency said 11,298 companies covering more than three million workers had flexible work arrangements and experienced temporary closures from March to September.

President Rodrigo R. Duterte locked down the entire Luzon island in mid-March, suspending work, classes and public transportation to contain a coronavirus pandemic. People should stay home except to buy food and other basic goods, he said.

The lockdown paralyzed a number of companies, forcing some of them to cut costs by letting go of their workers.

The Philippines entered into a recession after economic output shrank by 16.5% in the second quarter.

More than seven million Filipinos were jobless amid a coronavirus pandemic in April, driving up the country’s jobless rate to 17.7% — a 15-year record.

As lockdown restrictions loosened, the unemployment rate eased to 10% in July, according to the local statistics agency. This is equivalent to 4.6 million jobless Filipinos, lower than the 7.3 million in April but nearly double the 2.4 million a year earlier.

Underemployed Filipinos — those already working but still looking for more work — eased to 17.3% in July from 18.9% in April, but still higher than the 13.6% a year ago. This translates to 7.1 million underemployed Filipinos, slightly higher than the 6.4 million in April.

By sector, services made up the largest share of the employed population at 54.8% in July. Industry accounted for 18.8% and agriculture 26.3%. — Gillian M. Cortez

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