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Business

Jobless rate steadies in June but new lockdowns may erase gains

Ramon Royandoyan - Philstar.com

MANILA, Philippines (Update 2, 2:56 p.m.)  — The country’s unemployment rate was unchanged in June, but looming harsh lockdowns in Metro Manila could throw a spanner in the works.

A nationwide survey of 11,081 families showed there were 3.76 million people who were either unemployed or out of business in June, higher than 3.73 million in May, the Philippine Statistics Authority reported Tuesday. That figure translates to a jobless rate of 7.7% in June, unchanged from the previous month.

At the same time, quality of available jobs deteriorated . There were 6.41 million Filipinos who were looking for additional work in June to augment their income amid hard times, resulting into an underemployment rate of 14.2%, up from the previous month’s 12.3% rate.

That unemployment rate plateaued while underemployment remained elevated despite looser pandemic restrictions suggest that reopening the economy alone might not be enough to fix the problem. For Ruben Carlo Asuncion, chief economist for UnionBank of the Philippines, the labor market is already showing signs of “scarring”, wherein Filipinos are not getting their jobs back while quality of work remains poor despite improving economic conditions as lockdowns ease.

Nicholas Mapa, senior economist at ING Bank in Manila, agreed with Asuncion. “We’ve heard several times that the economy can fix itself by simply relaxing restrictions and we know now that this may not be the case.  The solid macroeconomic fundamentals are slowly fading,” Mapa said.

Data showed the slight increase in unemployed Filipinos in June coincided with an uptick in number of people trying to look for jobs, as graduates of the K-12 program join 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 65.0% in June to 48.84 million from 64.6% rate in the preceding month.

Already, economic managers are bracing for the impact of another enhanced community quarantine (ECQ) — the strictest lockdown there is — in Metro Manila this month. Considering how the local labor market quickly reacted to changes in community quarantine levels in the past, economic officials said the fresh restrictions will “temporarily impact employment outcomes”.

The National Economic Development Authority estimates that the new round of ECQ in the capital would leave 444,000 unemployed.

“Workers and their families must be enabled to cope with the adverse economic impact of the job and income loss by quickly downloading the cash aid and rapid vaccination on them,” Alan Tanjusay, spokesperson of The Association of Labor Unions – Trade Union Congress of the Philippines, said.

NOVEL CORONAVIRUS PHILIPPINE ECONOMY PHILIPPINE UNEMPLOYMENT
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