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Thursday, February 22, 2024

ECQ in August increased unemployment rate to 8.1%

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The unemployment rate in August climbed to a four-month high of 8.1 percent from 6.9 percent in July after Metro Manila was placed under the enhanced community quarantine to curb the spread of the more contagious Delta variant of COVID-19, the Philippine Statistics Authority said Thursday.

Data showed while the unemployment rate in August was lower than those reported in January, February and April, it was higher than the rates in March (7.1 percent) May and June (7.7 percent) and July (6.9 percent).

National statistician and civil registrar general Dennis Mapa said in a statement the total number of unemployed persons in August reached 3.88 million among individuals who are 15 years old and over.

“Employment rate in August 2021 dropped to 91.9 percent from the 93.1 percent in July 2021. In terms of magnitude, 44.23 million out of 48.12 million individuals in the labor force were employed,” Mapa said.

“This was higher than the employment rate in April 2021 [91.3 percent] during which the National Capital Region Plus Bubble was under enhanced community quarantine status,” Mapa said.

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Economic managers composed of Finance Secretary Carlos Dominguez III, Economic Planning Secretary Karl Kendrick Chua and Budget and Management officer-in-charge Tina Rose Marie Canda said in a joint statement the increase in jobless rate in August was expected, “given the stricter quarantine imposed to curb the spread of the delta variant.”

“We reiterate that the safe reopening of the economy, limiting restrictions to granular lockdowns and accelerating the vaccination program are key to our recovery. Based on a seven-day moving average, the number of COVID-19 cases have gone down by around 15 percent since the peak on Sept. 11, 2021. This trend will support the further reopening of the economy and the use of granular lockdowns to allow the majority to return to work and earn a living,” they said.

ING Bank Manila senior economist Nicholas Mapa said the September labor market figures should look relatively similar to the August figures with a slight improvement.

“We could see unemployment dip while underemployment will likely rise with mobility curbs and the overall downbeat economic outlook capping labor hours and wages,” Mapa said.

The economist also said business closures due to the protracted downturn and rising borrowing costs would likely limit the ability of the economy to provide enough job opportunities in the near term.

“This development will hamper household consumption for as long as the labor market faces these challenges and a clear cut sign that the Philippines is in need of sustained support and more than a year away from simply returning to pre-COVID levels of growth,” he said.

Labor force participation rate in August picked up to 63.6 percent, or about 48.12 million Filipinos 15 years old and over who were either employed or unemployed. This was higher than the LFPR reported in January 2021 (60.5 percent), February 2021 (63.5 percent), April 2021 (63.2 percent), and July 2021 (59.8 percent).

The number of underemployed persons decreased by 2.21 million, from 8.69 million in July to 6.48 million in August. Underemployment rate was estimated at 14.7 percent in August, the third lowest reported this year along with 12.3 percent in May and 14.2 percent in June.

The services sector consistently dominated the employment hub accounting for 56.0 percent of the total employed persons in August. The agriculture and the industry sectors contributed 25.1 percent and 18.9 percent, respectively.

In terms of month-on-month changes in the number of employed persons, the top five subsectors that showed the biggest increases in employment from July to August were agriculture and forestry (1.78 million); wholesale and retail trade; repair of motor vehicles and motorcycles (992,000); manufacturing (169,000); other service activities (148,000); and fishing and aquaculture (128,000).

The top five subsectors with the biggest drop, with their corresponding decreases, in the number of employed persons from July to August were education (-238,000); administrative and support service activities (-183,000); professional scientific technical activities (-110,000); construction (-85,000); and human health and social work activities (-83,000).

Economic managers remained optimistic the economy would be able to recover to its pre-pandemic growth trajectory by the end of 2022 or early 2023 through the accelerated implementation of recovery programs, especially the acceleration of the vaccination program.

Data from the government showed that as of Sept. 27, some 23.8 million Filipinos have received their first vaccine dose, while 20.6 million were fully vaccinated.

In the National Capital Region, more than seven million residents or 72.4 percent of its target population were already fully vaccinated. Other major cities, such as Iloilo, Angeles, Mandaue, and Lapu-Lapu City, reached at least 50 percent vaccination of target population.

Economic managers expect the pharmaceutical companies to deliver more than 125 million doses by the end of this year. The government is also preparing to inoculate minors between 12 to 17 years old. This would support the pilot face-to-face classes in low- risk areas.

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