The country’s largest labor group said job losses could hit 12 million before the year ends as a result of the COVID-19 pandemic, while the National Economic and Development Authority (NEDA) said unemployment is likely to hit a 15-year high as the economy slides into recession.
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The Trade Union Congress of the Philippines (TUCP) said Thursday the biggest job losses come from accommodation and food services, where more than a third of workers have lost employment, followed by arts and recreation services, where 27 percent of staff have found themselves out of work.
With no end in sight for the coronavirus health crisis, calls for social distancing are taking a bite out of service sector jobs that depend on customer interactions or involve the congregation of large numbers of people.
“Workers in industries such as restaurants, hotels, school care services, retail trade, and transportation services are at a higher risk of losing their jobs,” the TUCP said.
The TUCP said other sectors hard hit by job losses were “other services” (15 percent), real estate services (12 percent), administration and support (11 percent) and agriculture, forestry and fisheries (10 percent).
The labor group said at least 50 percent workers in retail trade and food services and drinking places were displaced by the COVID 19 crisis and could see even more job losses due to public health restrictions imposed to prevent the spread of COVID-19.
These two industries alone employ nearly 3 million Filipinos, the TUCP said.
Citing Philippine Statistics Authority (PSA) data, the group expressed alarm over the sharp rise in the unemployment rate, which jumped to 17.7 percent in the June quarter of 2020 from 5.1 percent in the same quarter a year earlier.
Strict stay-at-home rules forced most business operations to shut down. Those who can work from home were allowed to, but casual workers were forced into “no work, no pay” schemes since mid-March.
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In a recent interview with Bloomberg TV, acting NEDA director-general and Socioeconomic Planning Secretary Karl Kendrick Chua said the country is already in recession, as recent data showed that the economy contracted by 0.2 percent in the first quarter, a reversal of the 5.7 percent growth a year ago and 6.4 percent a quarter ago due to COVID-19.
Economists predict the second-quarter numbers could be even more grim as the lockdowns were extended several times to encompass the period from April to June.
A recession is characterized by two straight quarters of economic contraction.
If that happens, a double-digit jobless rate will be the highest in 15 years since it hit 8.4 percent in April 2005.
Based on the April 2020 Labor Force Survey released by the Philippine Statistics Authority on June 5, the unemployment rate rose to a record 17.7 percent accounting to 7.3 million unemployed Filipinos. This was significantly higher than the 5.1 percent unemployment rate in April 2019.
PSA said the record-high unemployment rate “reflected the effects of the COVID-19 economic shutdown on the Philippine labor market.”
The employment rate in April 2020 fell to 82.3 percent from 94.9 percent in April 2019. It was also lower than the 94.7 percent in January 2020. This translates to 33.8 million employed persons in April 2020, sharply down from 41.8 million in April 2019.
The average number of hours worked per week also fell to 35 in April 2020 from 41.8 hours per week in April 2019.
All regions reported double-digit unemployment rates. The highest unemployment rate was in Bangsamoro Autonomous Region in Muslim Mindanao (BARRM) at 29.8 percent.
It was followed by Region III (Central Luzon) and Cordillera Administrative Region with unemployment rates recorded at 27.3 percent and 25.3 percent, respectively.
The International Labor Organization (ILO), meanwhile, said policies need to be put in place to protect stranded migrant workers and to ensure the reintegration of those who return to their home countries.
Tens of millions of migrant workers, forced to return home because of the COVID-19 pandemic after losing their jobs, face unemployment and poverty in their home countries, the ILO said.
As containment measures ease, millions of migrant workers may be required to return home to low and middle income countries where labor markets, which were fragile before the COVID-19 outbreak, are now further weakened by the additional strain of high levels of unemployment and serious business disruptions due to the pandemic. In addition, their families will suffer financially from the loss of the remittances normally sent to them.
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Meanwhile, other migrant workers have found themselves stranded in host countries without access to social protection and little money for food or accommodation. Even those with jobs may be taking reduced wages and living in cramped worksite residences where social distancing is impossible, putting them at greater risk of contracting the virus.
Almost all of the world’s workers, some 94 percent, were living in countries with some type of workplace closure measures in place in May 2020, according to the UN Secretary-General’s Policy Brief on the World of Work and COVID-19 .
Massive losses in working hours, equivalent to 305 million full-time jobs, are predicted for the second quarter of 2020, while 38 percent of the workforce – some 1.25 billion workers – is employed in high-risk sectors.
The brief says small and medium-sized enterprises – the engine of the global economy – are suffering immensely and many may not recover. Those living in developing countries and fragile contexts face the most dramatic risks, in part because they have least resilience.
The policy brief, based on data and analysis from the ILO, warns that many of those people who have lost their jobs and livelihoods in recent months will not be able to re-enter labor markets any time soon.
Women have been particularly hard hit. They are disproportionately represented in high-risk sectors and are often amongst the first to lose employment and the last to return. Persons with disabilities, already facing exclusion in employment, are also more likely to experience greater difficulties returning to work during recovery.