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Pandemic expected to weaken job market

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A customer makes his transaction through a plastic barrier as a preventive measure against the coronavirus disease (COVID-19) in a 7-eleven convenience store in Quezon City, Metro Manila, Philippines March 26, 2020. -- REUTERS/ELOISA LOPEZ

By Carmina Angelica V. Olano
Researcher

JOSEPH LAGUERTA, 32, has been trying to get as many odd jobs as possible to replace the daily income of P650 he used to get as a carpenter in Makati City.

Since the implementation of a Luzon-wide quarantine due to the coronavirus disease 2019 (COVID-19) pandemic, he has tried looking for other jobs in Cavite.

“So long as I can bike my way to it, I will take any job. Fortunately, I still receive job orders from time to time… Somehow, my family manages to get by,” he said in Filipino.

But now with his barangay under total lockdown, Mr. Laguerta cannot even go out anymore, except to buy groceries and medicine.

The Philippine economy may decline by as much as 0.6% this year, the National Economic and Development Authority said in its report “Addressing the Social and Economic Impact of the COVID-19 Pandemic.”

Job losses are estimated between 116,000 to 1.8 million as the economy stands to lose between P428.7 billion to P1.36 trillion in gross value added or equivalent to 2.1%-6.6% of its nominal gross domestic product (GDP) this year.

“There is no one who is not affected by COVID-19. Everyone is affected due to its social, economic, emotional, psychological and spiritual strain,” Alvin P. Ang, an economics professor at the Ateneo de Manila University (ADMU), said in an e-mail.

University of Asia and the Pacific (UA&P) School of Economics Dean Cid L. Terosa said via e-mail that those in the informal sector and daily wage earners “will be the ones most affected.”

“We have wage workers who are considered semiformal or non-regular employees, like the drivers of transport network vehicle services like Grab and Angkas, or any commission-based workers who cannot go out and do their usual source of income,” Rene O. Ofreneo, professor emeritus at the University of the Philippines (UP), said in phone interview.

“All of a sudden, the Philippines is facing an employment crisis in different fronts, even after we surpass COVID-19, restarting the labor market will remain a problem,” he said.

Around 35% of the country’s employment came from the informal sector, according to the January 2020 round of the Philippine Statistics Authority’s Labor Force Survey (LFS). Of these, 26.2% were self-employed without any paid employee; 2.4% were employers of their own family-operated farm or business; and 6.2% are working without pay in their own family-operated farm or business.

To aid workers during the Luzon-wide quarantine, the Department of Labor and Employment (DoLE) earlier announced the immediate roll out of P1.3 billion worth of COVID-19 adjustment measures to help about 250,000 workers. Likewise, a P180-million emergency employment program will be given to some 18,000 disadvantaged or displaced workers in the informal sector.

The government also announced a P27.1-billion relief package to aid affected sectors. This will go to programs for upskilling and reskilling of temporarily-displaced workers, zero-interest loans for small farmers and fisherfolk, wage subsidies or financial support for affected workers and firms, unemployment benefits and loans for micro, small, and medium enterprises.

However, analysts said the government should do more to further protect workers.

UP’s Mr. Ofreneo highlighted the central role of the government in a “whole-of-society” approach of providing social protection during the ongoing crisis.

“The government should save everybody, especially the workers. There should be a registry of employees identifying who are in the formal and informal sectors, at least per local government unit,” he said.

The whole-of-society approach refers to joint efforts of government agencies and the private sector in providing a common solution to a problem.

“It is understandable that daily wage earners need to be given priority as they will be the most vulnerable among workers. DoLE is on the right track, but they may need more resources for the program they rolled for the affected work force,” ADMU’s Mr. Ang said.

Mr. Ang said that during the community quarantine, the public and private sectors’ “resources should be coordinated and put to best use.”

“The public and private sectors can work together by funding logistics and movement of people within cities. Delivery services of food and essentials, mobility of health workers and other frontliners service such as those in supermarkets, drug stores, wet markets, security personnel should be subsidized and organized uniformly across the country. This should help keep afloat the public transport sector especially the daily earners,” he said.

For UA&P’s Mr. Terosa, the government’s stimulus package for workers “may not be sufficient.”

“If GDP will fall by 0.6-1 percentage point (ppt), around 30,000 to 50,000 jobs will be directly lost. The stimulus package may create only 15,000 to 17,000 jobs,” he said.

Aside from direct losses, Mr. Terosa also pointed to “disastrous” opportunity costs caused by the pandemic: “If GDP will fall by 0.6-1 ppt, 300,000 to 500,000 jobs would not be created and P500-800 billion pesos worth of goods would not be produced. Imagine that,” he said.

OUTLOOK
The latest LFS result puts the country’s unemployment rate at 5.3% and the underemployment rate at 14.8%, both of which were the lowest among the January rounds of the LFS since 2005.

This would most likely not be the case this year, economists said.

“Definitely unemployment figures will rise. Even if temporary, we might see a double-digit increase,” UP’s Mr. Ofreneo said.

UA&P’s Mr. Terosa said the low unemployment and underemployment rates will be not be maintained in the first half.

“First-quarter unemployment and underemployment rates will be slightly above last year’s rates, but [the second-quarter] unemployment rate can hover close to double-digits while underemployment rate can soar close to 18-20%,” he said.

“I believe that we need to wage war against the virus first and win the economic battle later… As long as the spread of the disease is palpably rampant, there is nothing much that everyone can do,” said Mr. Terosa said.





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