Home Editors' Picks Unemployment to persist after PHL economic rebound — ADB

Unemployment to persist after PHL economic rebound — ADB

Traffic is seen along EDSA as mobility restrictions eased in November. — PHILIPPINE STAR/ MICHAEL VARCAS

THE CORONAVIRUS PANDEMIC will have long-term effects on Philippine employment even after the economy rebounds, the Asian Development Bank (ADB) said.

Despite recent improvements in the jobs situation, ADB Senior Economist James P. Villafuerte said the unemployment rate is still above the long-term trend, leading many Filipinos to shift to informal and precarious work.

Unemployment, he said, has disproportionately affected young people, women, and low-skilled workers.

“Although the unemployment rate has eased since 2020, millions of workers are still jobless and working fewer hours and taking part-time jobs,” he said at an online event on Thursday.

Preliminary data show that unemployment eased to 6.5% in November compared with 7.4% a month earlier. In absolute terms, there were 3.159 million unemployed Filipinos in November, down from 3.504 million in October.   

This was the lowest jobless rate since the government started releasing data monthly in 2021. Including the quarterly releases, the November figure was the lowest since the 5.3% logged in January 2020.

The unemployment rate hit a record high of 17.6% in April 2020, when the government implemented the strictest lockdown to contain the pandemic.

The International Labour Organization projects Philippine unemployment to reach 1.1 million in 2022, or 10% higher than pre-pandemic levels. The organization said the impact of the pandemic on jobs could be even bigger after a large-scale exit from the labor force, which does not count as unemployment.

Although most sectors saw job losses, the shift to remote work meant that information technology, business, and professional services jobs were more resilient.

“This change in employment composition is actually expected to persist in the medium and long term. Many companies in the Philippines have been rapidly adopting technology in their business models,” Mr. Villafuerte said.

However, the digital shift will require higher value-added skills that could increase the mismatch between expertise needed by employers and the skills of displaced workers.

“The longer these displaced workers and new labor market entrants are unable to find a job, the more likely that they will become less employable because of lost skills,” Mr. Villafuerte said.

The ADB’s COVID-19 Country Assessment Report – Southeast Asia suggested the government strengthen labor market programs to help workers and enterprises transition to higher value skills.

Policy priorities include enterprise-led training reforms that include industry apprenticeships, unemployment insurance that would ensure income stability, and support for small businesses.

Findings from the ADB report are still preliminary until the official release in mid-March.

The ADB expects Philippine gross domestic product (GDP) to expand by 6% this year, lower than the government’s 7-9% goal.

But this growth is sensitive to the pandemic and health policy interventions.

“Almost two years after the pandemic started, Southeast Asia is recovering slowly. However, the extent of recovery remains tentative, uneven, volatile, and sensitive to the path of the pandemic,” Mr. Villafuerte said.

Due to the effects of more COVID-19 variants, Philippine GDP could grow by 0.4 percentage points lower than ADB anticipated. But with increased health spending, the economy could expand by 1.1 percentage points higher.

“Investment in health seems to be one of the policy levers that the region could use to actually reinvigorate growth.”

ADB expects Philippine GDP to have grown by 5.1% in 2021. This would reverse the record 9.6% contraction in 2020, but is still lower than the pre-pandemic 6.1% expansion in 2019.

The statistics agency is scheduled to release fourth-quarter 2021 GDP data on Jan. 27.  Jenina P. Ibañez