Fresh lockdowns destroy more jobs in August

MANILA, Philippines (Update 1, 11:14 a.m.) — Fresh restrictions imposed in August to curb the spread of hyper-contagious Delta variant threw more people into unemployment during the month.

There were 3.88 million people who were either unemployed or out of business in the Philippines in August, up from 3.07 million in July, results of a survey of 10,919 households by the Philippine Statistics Authority showed Thursday.

That translated to a jobless rate of 8.1% in August, up from 6.9% in July. For economic officials, the higher unemployment figure was “expected” due to the brief return to enhanced community quarantine (ECQ) last month to arrest a renewed surge in infections.

“We reiterate that the safe reopening of the economy, limiting restrictions to granular lockdowns, and accelerating the vaccination program are key to our recovery,” economic managers said in a joint statement.

Broken down, the education sector posted the largest month-on-month contraction in employment in August after shedding 238,000 jobs. This was followed by administrative and support service activities, which lost 183,000 jobs.

Meanwhile, fewer Filipinos looked for additional jobs in August to augment their income. Data showed there were 6.49 million people who were underemployed during the month, yielding a rate of 14.7%, down from 20.9% in July.

“I guess it simply means that workers that managed to keep jobs in August are able to working longer hours in August and, therefore no longer considered underemployed,” Jun Neri, lead economist at Bank of the Philippine Islands, said.

But for Leonardo Lanzona, labor economist at Ateneo de Manila University, the increase in jobless rate and easing of underemployment rate only reflect the lack of choices for workers who wanted better paying jobs amid hard times.

“Precisely, since the unemployment worsened, underemployment is expected to fall since people are not looking for additional jobs anymore, knowing that the work they have may be the only one available,” Lanzona said.

“The lockdown has limited whatever options they have.  It remains that the jobs they have are of low quality, and they cannot do anything about it,” he added.

The higher unemployment rate coincided with an uptick in number of people trying to look for jobs, which National Statistician Claire Dennis Mapa attributed to fresh graduates joining the labor force at a time pandemic-hit companies are not hiring workers. The labor force participation rate, representing people aged 15 years and above who are actively looking for work, grew to 63.6% in August, up from 59.8% in July.

For Nicholas Mapa, senior economist at ING Bank in Manila, 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. “Business closures due to the protracted downturn and rising borrowing costs will likely limit the ability of the economy to provide enough job opportunities in the near term.”