Unemployment eases in 2021 but still lags behind pre-pandemic levels

MANILA, Philippines — The country's unemployment situation fared better in 2021 compared to the height of the pandemic in 2020 as economic prospects improved then, but it still lagged behind pre-pandemic jobs figures.

In an online briefing on Thursday, the Philippine Statistics Authority reported that the preliminary unemployment rate in 2021 declined to 7.8%, equivalent to 3.7 million Filipinos who were either jobless or out of business last year. Back in 2020, when scores of businesses and companies slashed their workforce as a result of pandemic curbs, unemployment was a record-high 10.4%.

The unemployment rate in 2019 stood at 5.1%.

The rate of underemployment, or the proportion of those looking for more work to augment income, in 2021 eased to 7 million Filipinos for the whole year, translating to a rate of 15.9%. This was slightly lower than the 16.4% rate, or 6.4 million underemployed, that was recorded in 2020.

On a monthly basis, the Labor Force Survey in December last year saw 910,000 Filipinos aged 15-years-old and above participate, yielding a rate of 65.1% that was higher compared to November owing to the seasonality of jobs and the loosening of restrictions then.

The PSA reported that unemployment in the final month of 2021 rose 6.6% to 3.27 million Filipinos from the 6.5% rate recorded in November. National Statistician Clare Dennis Mapa said this was because many in the public joined the workforce during the survey period but could not find a job.

"Not all who participate [in the survey] are set to get hired, there's still a number that doesn't get employed," Mapa said.

Underemployment in December slid down 14.7% from the 16.7% rate recorded in the preceding month. This was the fifth-lowest underemployment print last year, with Mapa explaining that more and more Filipinos participate in the labor market when restrictions ease.

The employment rate in the same month, the highest since January 2021, stood at 93.4%, or an estimated 46.27 million Filipinos who found work then. 

For Nicholas Antonio Mapa, senior economist at ING Bank in Manila, this was an indication that the national government's pandemic response and economic reopening was finally paying off.

"The slight increase in the unemployment figures was largely driven by the improvement in participation rate even as roughly 797,000 more workers found jobs compared to the previous month. The increase in net jobs created reminds us of the positive impact of virus containment and reopening," Mapa said in an e-mailed commentary.

The PSA noted a silver lining for employment in December since scores of Filipinos aged 25-34 found gainful employment since the increase was "significant."

Data broken down showed the agriculture and forestry sector created 1.07 million jobs while the manufacturing sector brought in 325,000 jobs in December. However, loss of work was seen in the fisheries and aquaculture sector, which shed 393,000 jobs and other service activities, 289,000, in the same period.

Sought for comment, Jun Neri, lead economist at Bank of the Philippine Islands, said that the impact of super typhoon "Odette" on the labor market will be felt in the January data release, as what the PSA confirmed in its briefing.

"We will probably see a spike in joblessness in January but we can all look beyond that now that we know that we have reverted to Alert Level 2 and we are getting closer to 70% full vaccination of the target population by the second quarter of 2022.," Neri said in a Viber message.

The National Economic and Development Authority said in a statement that the employment crunch would be temporary in January, following the revert to stricter restrictions as a result of the Omicron variant surge. Leonardo Lanzona, labor economist at Ateneo De Manila University, agreed.

"The jobs affected by Odette are agricultural in nature and may be easily restored once the storm has died down.  The increase in unemployment is an indication that much of the recovery has been due to investments particularly by the government in the construction sector," Lanzona said in a text message.

But Lanzona projects that some jobs lost due to the pandemic, possibly as some firms shuttered operations or adjusted their business models, could prove permanent, which could inevitably leave more Filipinos fighting for a source of income.

"The jobs that were lost due to covid are no longer viable.  The government should have a comprehensive industrialization program that will employ the current labor surplus. Without this, there seems very little prospect for a jobs recovery," Lanzona added.