Unemployment rated eased to 10 percent in July from a record high of 17.7 percent in April, following the government’s easing of quarantine restrictions to support the economy, which went into a technical recession in the first half because of the COVID-19 pandemic, the National Economic and Development Authority said Thursday.
Data from the Philippine Statistics Authority, however, showed the July figure was higher than the unemployment rate of 5.4 percent in the same month last year. The PSA said there were 4.6 million unemployed Filipinos who were 15 years old and over in July 2020, up by 2.1 million from the same period last year but down by 2.7 million from three months ago.
“The decrease in the unemployment rate means that some 2.7 million jobs returned as the quarantine level eased. In addition, some 4.9 million workers rejoined the labor force. All in all, some 7.5 million jobs were restored,” acting NEDA Secretary Karl Kendrick Chua said in press briefing.
He said the five sectors that saw the most number of returning jobs were trade, agriculture, construction, manufacturing and transport. These sectors directly benefited from the relaxation of quarantine measures and were important contributors to jobs and GDP growth.
Meanwhile, the underemployment rate, which represents those with jobs who still need more hours of work, decreased to 17.3 percent in July from 18.9 percent in April.
“Government programs to provide income support to workers through the Small Business Wage Subsidy Program and to low income families through the Social Amelioration Program have contributed to the moderate increase in underemployment amid the crisis,” Chua said.
He said the July survey figures showed a direct link between the level of quarantine restriction and labor market outcomes. In the first half of May, 78.8 percent of the economy was placed under ECQ. As a result, GDP and unemployment worsened to record levels.
Data showed that in the first half of July, only 2.1 percent of the economy was placed under ECQ. Chua said the result was a significant reduction in the unemployment rate and the return of some 7.5 million jobs.
“In the coming months, better GDP and job numbers will hinge on how open the economy is. This entails a better strategy to ‘prevent, detect, isolate, treat and recover’. It also requires a safe and sufficient number of public transportation that, if needed, is supported by service contract subsidies,” Chua said.
He said without the public transport system back sufficiently, many people could still not go back to work. He said under GCQ, the share of the NCR economy that was allowed to reopen was 58.2 percent, but without sufficient public transport, it declined to 35.5 percent.
“To bounce back from this crisis, we will need to open the economy even more. This will depend on everyone working together to adhere to health standards, as the government accelerates the implementation of the recovery program,” Chua said.
The PSA data showed that labor force participation rate in July averaged 61.9 percent, lower than 62.1 percent in July 2019. In April 2020, the lowest LFPR in the history of the Philippine labor market was recorded at 55.6 percent.
The economy contracted by 9 percent in the first half, following the 0.7-percent decline in the first quarter and 16.5-percent fall in the second quarter because of the impact of the pandemic. As a result, the government adjusted the 2020 growth forecast to a 5.5-percent contraction from the earlier assumption of 2-percent to 3.4-percent contraction.