At least 7.3 million Filipino workers lost their jobs due to the effect of the coronavirus disease 2019 pandemic, the highest since 1998, the Department of Labor and Employment (DOLE) said Friday.
Before the COVID-19 pandemic, the employment situation was vibrant, expanding at 4 percent or 1.6 million net jobs created, the department said.
It said it expected employment would suffer, given the extent to which the health crisis crippled most economic activity.
Labor Secretary Silvestre Bello III said the imposition of a Luzon-wide lockdown meant hundreds of thousands of establishments resorted to temporary closures or flexible work arrangements, affecting millions of workers both at home and overseas.
The 17.7 percent unemployment rate, which translates to 7.3 million people unemployed, is at the highest, surpassing the 10.3 percent unemployment rate in the 1998 recession.
“We also recognize the huge drop in the labor force participation rate at 55.6 percent, the lowest in the history of the Philippine labor market. The lockdown during the community quarantine from March to May, which is supposed to be the period for job hunting of our fresh graduates, has put the labor force in a standstill as two-thirds of the economy is shut down,” he said.
He said he is hopeful, however, that the labor market will recover as the economy opens gradually.
The Philippine Statistics Authority (PSA) said the employment rate in April 2020 fell to 82.3 percent from 94.7 percent in January 2020. In April 2019, it was 94.9 percent.
This translates to 33.8 million employed persons in April 2020 from 41.8 million in April 2019.
In the House, lawmakers approved the P1.5 trillion COVID-19 Unemployment Reduction Economic Stimulus (CURES) Act of 2020.
House Bill 6920 authorizes the government to release P500 billion annually for the next three years to fund infrastructure projects in five sectors, namely health, education, agriculture, local roads and livelihood, considered most affected by COVID-19. The bill’s approval came as Congress adjourned sine die.
House Majority Leader and Leyte Rep. Martin Romualdez said such infrastructure projects would include barangay health centers, municipal and city hospitals, digital equipment for COVID-19 testing, telemedicine services, post-harvest facilities, trading centers, and farm-to-market roads.
One of the bill’s authors, Deputy Speaker and Camarines Sur Rep. Luis Raymund Villafuerte, said the measure will set the stalled economy back on its high-growth path and would boost President Duterte’s new initiative to decongest Metro Manila by creating a lot more infrastructure jobs in the countryside.
“This measure aims to blunt the impact of what the International Monetary Fund (IMF) expects to be the worst global recession since the Great Depression in the 1930s by stimulating economic activity and creating so many jobs in the countryside,” Villafuerte said. “In so doing, CURES will at the same time boost President Duterte’s Balik Probinsya, Bagong Pag-Asa program by encouraging city dwellers to return to their home provinces amid the prospects of more employment and livelihood opportunities in the regions outside the national capital.”
The stimulus program is anchored on infrastructure spending outside Metro Manila to reset the economy and and generate jobs following the sudden work stoppage set off by the quarantine measures that were effected in mid-March to hold back the COVID-19 pandemic.
The House of Representatives’ ways and means committee chairman and Albay Rep. Joey Sarte Salceda warned of “potentially deep troubles ahead” if the government is unable to pass a meaningful stimulus plan and the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act early within the next half.
Salceda made the statement as he reiterated his appeal to President Duterte to call for a special session of Congress to get these bills passed.
“Although the jobless figures say you have 5 million more unemployed workers, the problems could actually be bigger, as you had almost 8 million fewer workers who were employed in April 2020 compared to April 2019. Most of them were in the services sector,” Salceda said, citing Philippine Statistics Authority data that shows that there were 5.34 million fewer employed persons in the services sector.
“Much of the figures in the services sector, of course, are attributable to the enhanced community quarantine. Many small businesses were unable to open, so their workers were also unable to go to work. We should see some uptick from this month’s figures to May and June figures,” Salceda added. “These are warning signs of deep troubles ahead unless we can create new jobs, and not just protect the ones that exist. The best job creator, infrastructure, will be extremely critical in getting our people back to work,” he added.
The job figures, Salceda said, do not yet include overseas Filipino workers (OFWs) who are not considered part of the domestic labor force. Salceda says he estimates that more than 400,000 OFWs may be temporarily unemployed. Many of them, he added, can easily be hired as skilled workers in the construction sector, so an enhanced Build, Build, Build will really be crucial to giving them employment. “But you also need to create strong aggregate demand in general, as most of these workers will opt to be small entrepreneurs in the meantime,” he added.
A party-list legislator on Friday appealed for immediate government intervention to help small businesses recover from the more than two-month-long lockdown.
Rep. Alfred Delos Santos of Ang Probinsyano said while some big businesses have been allowed to slowly reopen, most small and medium businesses, which account for 99 percent of the enterprises operating across the country based on 2018 official data, may have a hard time resuming operations without the government’s needed assistance.
“As the sector responsible for creating over 63 percent of the country’s total employment in 2018, it is hard to ignore their contribution to our economy. We cannot also ignore their pleas for help,” Delos Santos said.
Because of the lockdown in Luzon, home to close 47 percent or 467,581of the total small and medium companies in the country, many businesses were forced to close shop until now and may cease operations later on due to cash flow problems.
To ease the burden of small business owners, delos Santos has already appealed to the Department of Trade and Industry (DTI) to amend Memorandum Circular 20-12 which provides a 30-day grace period on commercial rents of micro-, small- and medium enterprises (MSMEs) hat have ceased operations during the lockdown without incurring interest penalties, fees and other charges. It also calls for a repayment period spread over six months.
The congressman is pushing for a substantial discount in rental obligation or a waive of rental fees of MSMEs to help them cope with their losses, pay their bills and keep their staff employed.