Increased unemployment is one of the adverse consequences of protracted lockdowns. After reaching an all-time high of 17.7 percent in the second quarter of 2020, the country’s unemployment rate in June 2021 eased to 7.7 percent as reported by the Philippine Statistics Authority (PSA) last August 3.
This means 3.76 million Filipinos, age 15 and older, were unemployed in June – lower than the levels reported in January, February and April this year, but higher than the 7.1 percent reported in March 2021. Before the pandemic, unemployment was at a record low of 4.5 percent in end-2019.
Equally worrisome as unemployment is underemployment, which increased to 14.2 percent in June from approximately 12.3 percent in May. In terms of magnitude, there was an increase of 918,000 underemployed persons, from 5.49 million in May to 6.41 million in June. In contrast the actual number of unemployed increased by 30,000 from May to June. For every one person that was added to the rolls of the unemployed, 31 more became underemployed.
PSA reports that the following five subsectors registered the highest increase in employment: a) Administrative and support service activities (282,000); b) Wholesale and retail trade; repair of motor vehicles and motorcycles (259,000); c) Fishing and aquaculture (194,000); d) Education (132,000); and e) Agriculture and forestry (118,000).
In contrast, the following were the top five subsectors with the largest drop in employment from May to June 2021: a) Other service activities (-241,000); b) Accommodation and food service activities (-143,000); c) Public Administration and defense, compulsory social security (98,000); d) Transportation and storage (-76,000); and e) Financial and Insurance activities (-71,000).
Aside from the economic downturn, the pace of digital transformation across all sectors has accelerated, rendering many jobs unnecessary. Aside from the people-intensive hotel, restaurant and tourism sector that is bearing the brunt of enforced lockdowns, activities that could be automated multiplied in the “new normal,” sidelining workers in favor of digital platforms. Meanwhile, E-commerce flourished and created new job opportunities.
While the Department of Labor and Employment worries about the urgency of providing social safety nets, legislators are concerned about the “next normal.” They are signaling the need for significant reforms in vocational training and education to address an estimated employment gap of 2.4 million vacancies in skilled jobs. The business process outsourcing (BPO) sector is projecting an annual increase ranging from 3.5 percent to 7.5 percent in the next three years.
The Technical and Skills Development Authority (TESDA), has launched community-based reskilling and upskilling training programs that could respond to the needs of logistics firms and other sectors. This means that even Filipinos residing in remote countryside could enroll in online courses that would enable them to pursue income-generating activities. TESDA estimates that it could train up to 358,000 learners this year.
If matched with the House estimate of 2.4 million unfilled vacancies in skilled jobs, this is a tall order that requires a more comprehensive whole-of-government and whole-of-society response.