Philippine jobless figure seen returning to pre-crisis level only by 2023

MANILA, Philippines — The International Labour Organization is expecting the Philippines’ jobless rate to ease to pre-crisis level only by 2023 as pandemic struggles continue worldwide.

In a report released Tuesday, the UN-backed agency estimated unemployment figure in the Philippines to have settled at 1.1 million last year, and forecasts to stay on that level by the end of this year. In 2023, ILO see the number of jobless Filipinos declining to 1 million, back to pre-pandemic level.

"Note that this crisis triggered a large exit from the labour force, which does not count as unemployed. Hence, the employment impact is much larger than what unemployment shows," Khalid Hassan, director of the ILO Country Office for the Philippines, said when sought for comment.

For labor economist Leonardo Lanzona, the slow easing of unemploymnet numbers could be a result of coronavirus variants becoming less virulent, which could lessen the burden on hospitals and the chances of renewed lockdowns that could destroy jobs.

"This can be a result of the base effects on growth as the virus becomes less fatal," Lanzona said in a text message. "But we still need to make sure that earnings are enough to meet the basic needs of the households."

The jobless figures would stay elevated while more people join the country’s workforce in the coming years. In the Philippines, the ILO estimated the Philippines' labor force to expand to 45.9 million this year, from 43.8 million in 2021. By 2023, the labor force could figure as high as 47.4 million. This means ILO now expects people who exited the labor force at the onset of the pandemic "to be returning at a slower pace".

For Nicholas Antonio Mapa, senior economist at ING Bank in Manila, this projected growth in labor force would be a problem for the government if the economy could not generate emough stable jobs for the people.

"It all depends on whether we can continue to open up the economy and generate enough jobs to absorb all that additional labor.  To date we know that both unemployment and underemployment levels are elevated as the economy operates on partial capacity to comply with health and safety standards,” Mapa said in a Viber message.

“A gradual but sustained march towards reopening may translate to more jobs and hours available for labor,” he added.

ILO's Hassan agreed with Mapa. "Up until 2019, the prevalence of temporary work was increasing gradually. At the start of the COVID-19 crisis temporary workers suffered job losses at a higher rate than other workers," Hassan said.

"Some of the labour force exits might be reversed as people are less afraid for their health, or as they can fully rely on care services to take care of their dependents like their children. Women however will continue to bear the brunt of the additional care burden created by the COVID-19 crisis, so we also expect the disproportionate impact on women to persist," Hassan added.

Overall, the ILO projected global unemployment to stay above pre-pandemic levels until at least 2023. Worldwide, the 2022 level estimated unemployment at 207 million compared to 186 million back in 2019.

In a report, the ILO also downgraded its global outlook on jobs this year, as the pandemic continues to hamper recovery efforts within the labor market. The downward projection meant the ILO was expecting a deficit in hours worked globally, which is equivalent to 52 million full-time jobs, compared with data in the final quarter of 2019. Back in May 2021, the ILO forecast a deficit of 26 million full-time jobs.

ILO Director-General Guy Ryder said the world is witnessing "a potential lasting damage to labor markets," since many workers are required to "shift to new types of work." The same report noted that Europe and North America show the most encouraging signs of recovery while emerging economies such as in Southeast Asian, Latin America and the Caribbean possess the most negative jobs outlook.

According to the ILO, lower-middle-income countries, where the Philippines is categorized, fare worst in terms of labor market recovery. The ILO report already factored in the effects of the Delta and Omicron variants into jobs as well as pandemic uncertainty.

“On the other hand, the start and stop episodes associated with virus surges usually lead to labor metrics heading in the wrong direction," ING Bank’s Mapa added.