As many as 5 million more workers will lose their jobs before the end of the year, bringing to 9 million the number of workers displaced by the coronavirus disease 2019 (COVID-19) pandemic, Labor Secretary Silvestre Bello III said Wednesday.
In a virtual Senate hearing, Bello estimated that the Philippines could lose about 10 to 15 percent of its workforce.
“Our estimate is that we might lose about more than 4 to 5 million jobs… mostly in the service sector, tourism, and its allied businesses like restaurants, including transportation,” Bello said.
“The vast majority of the industry’s layoffs were in food service, entertainment, and transportation,” the Department of Labor and Employment (DOLE) said in a statement.
Data from DOLE show the majority of workers that were affected by the pandemic are from the professional and business services sector, which includes lawyers, accountants, engineers, and temporary workers, such as laborers, office clerks, and packagers.
It also includes temporary help workers, typically contracted on a per diem or per-project basis.
The Philippine Statistics Authority (PSA) earlier said the country’s unemployment rate ballooned to a record 17.7 percent during the three-month lockdown in Luzon, which translates to 7.3 million jobless Filipinos.
However, Bello said the government has already crafted a recovery plan to spur employment by pushing for the implementation of pending infrastructure projects and the resurgence of the business process outsourcing (BPO) industry.
The full implementation of the government’s Build, Build, Build program and the resumption of other construction activities are expected to reduce the unemployment numbers, Bello said.
He said the DOLE has requested a P40 billion budget from the House of Representatives to finance its recovery programs.
“Job cuts will weaken economic activities… We need to secure jobs,” Bello said.
The DOLE Job Displacement Report said a total of 90,215 employees were displaced from 3,189 establishments from January 2020 to June 21.
The report was based on notices of shutdown and retrenchment submitted by employers to the DOLE regional offices, and doesn’t account for the underground economy jobs or informal sector workers.
Some 91 percent or 2,895 establishments reduced their workforce while the remaining 294 establishments or 9 percent reported permanent closure.
The National Capital Region (NCR) recorded the highest number of displaced workers at 45,046, followed by Calabarzon, 17,805; Central Luzon, 8,107; Cordillera Administrative Region, 5,136; Central Visayas, 3,992; Ilocos Region, 2,581; Northern Mindanao, 2,173; Davao Region, 1,010; Western Visayas, 932; Cagayan Valley, 929; Eastern Visayas, 906; Bicol Region, 520; Caraga Region, 483; Soccsksargen, 357; Mimaropa, 217 and Zamboanga Peninsula, 21.
It said based on the monthly breakdown, the month of June saw the highest number of reporting establishments, equivalent to 57 percent, with 36,086 workers displaced.
This is followed by the month of February with 371 reporting establishments (12 percent), covering 30,712 displaced workers nationwide.
In terms of major industry groups, most displaced workers were from the sectors of administrative and support service (31 percent or 28,192) and manufacturing (11 percent or 10,260).
Meanwhile, it said that a total of 104,163 establishments covering 2,824,992 workers are implementing flexible work arrangements (FWAs) and temporary closure (TC).
Of the number, a total of 23,855 establishments with 990,176 workers have implemented FWAs.
A total of 82,086 establishments with 1,954,419 workers resorted to temporary closures.
Earlier, the DOLE said it is ready to assist workers who have lost their jobs due to retrenchment and closure of their companies.
It ensures that separation benefits are provided to affected employees and can also facilitate employment in available vacancies in the labor market.
Senate President Vicente Sotto III, meanwhile, said the government should augment the budget earmarked by the Department of Trade and Industry (DTI) for its Covid-19 Assistance to Restart Enterprises (CARES) program aimed at helping micro, small and medium enterprises (MSMEs).
Sotto said the P1 billion budget for the program is not enough to help MSMEs jumpstart their businesses following the economic downturn that they suffered when most provinces of the country were placed under strict quarantines in a bid to contain the spread of COVID-19.
He said small and medium companies are just starting to resume operations, with most if not all of them operating at 30 to 50 percent.
“They suffered huge income losses when their businesses were shut down for more than two months. It is the responsibility of the government to help them recover from their meltdowns,” Sotto said.
The DTI’s CARES loan facility aims to help MSMEs by providing loans ranging from P10,000 to P200,000 for micro enterprises and up to P500,000 for small enterprises. The loan is channeled thru the agency’s financing arm SB Corp.
The program was launched in mid-May. Barely a month after the program opened, the SBC announced it was suspending loan applications as it has already breached its funding capacity of P1 billion.
Sotto said the application period was too short.
“Many MSMEs were still in the process of assessing their income losses and have yet to determine the amount of funding assistance they needed to restart their businesses. The one-month application period was too short for them to have availed of the government loan. The DTI should reopen the application period to allow more small and medium businesses to apply,” Sotto said.
Data from the DTI show there are over 1 million business establishments in the country, of which, 99.52 percent or 998,342 are MSMEs.
Most of these MSMEs are located in the National Capital Region, Central Luzon, and Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) regions.
Sotto said the Department of Budget and Management can tap the Executive’s COVID emergency response budget for the needed extra funds.
Also on Wednesday, Senator Imee Marcos said advisories issued by DOLE should be changed immediately to resolve the floating status of employees who continue to face the COVID-19 pandemic without any income.
“Six months is too long for employees to be on floating status without pay during an economic crisis. Employees feel that their patience is being pushed to the point that they would just resign, so that their employers can void tenure and need not pay the separation benefits due for every year of service,” Marcos said.
Labor advisories 9 and 17 allow companies to modify work arrangements and adjust wages and wage-related benefits for up to six months as remedial measures while community quarantines are in place.
“Despite the good intentions to preserve employment while helping business in distress, the DOLE advisories were made in haste and lacked thorough review. They failed to take into account the temporary nature of [community quarantines],” Marcos said.