Job losses rise despite economic reopening

MANILA, Philippines — Layoffs have persisted more than a month since the government relaxed lockdowns and permitted businesses to reopen, demonstrating the uphill challenge for an economic recovery from the pandemic.

In the latest labor department report, permanently displaced employees in the formal sector, or those in registered businesses, hit 121,921 from 501 establishments as of July 13, up 8.5% from the previous week.

The number surged to 2.97 million when displacement as a result of temporary closures and those forced to work-from-home arrangements are counted. Even using this gauge, the number of affected workers rose from 2.89 million a week ago.

The gloomy labor picture reflects the anticipated slow pace of economic recovery, one that is not expected to be in full swing until next year. Economic managers have given up growth ambitions this year, with the central bank projecting contraction in succeeding quarters, indicating fewer reprieve for the Filipino worker. The number could be worse if the informal sector is considered.

Alan Tanjusay, spokesperson of Trade Union Congress of the Philippines, a labor group, was not surprised for the continued spike in job losses even with most of the economy already back in business.

“One of the reasons for the growth is because for some reasons there are firms that submitted their layoff reports just recently,” Tanjusay said in a text message.

An estimated 63.1% of workers nationwide returned to work as early as June 1, when Metro Manila transitioned to a looser general community quarantine regime, indicating that not all companies reopened at the time. 

Since the labor agency based their data on firms “which voluntarily submit reports,” a delayed reopening of companies likely meant a belated submission of worker reports.

“The number also grew because there are firms that qualified for cash assistance for their employees,” he said.

By region, majority of permanently reduced workers came from the National Capital Region with 50,696 retrenchments, followed by Calabarzon (29,833) and Region III (14,882), official data reflected.

By industry, the bulk of employees retrenched came from administrative and support services that took the heaviest blow with 31,816 displaced workers, accounting for 26% of total. The sector was followed by manufacturing which eliminated 17,295 staff, or a 14-percent share.

Shortage in public transport to blame

Sergio Ortiz-Luis Jr., president of Employers Confederation of the Philippines (ECOP), an industry group, said he expects job cuts to soar as quarantine measures remain in effect and public transportation remain incapable of absorbing returning workers, while following health standards.

For instance, majority of jeepneys, which are among the main transport modes, remained barred from carrying passengers due to fears social distancing measures will not be followed on the vehicles. Manila’s train systems also continue to operate way below capacity.

“As the lockdown prolongs, the number of companies who are hesitant to resume operations will increase. A lot of companies want to reopen, but it's not feasible because their employees cannot go to work due to lack of public transportation,” Ortiz-Luis said in a phone interview.

“It is important to resolve the issues that force companies to shut down. Many of these firms and their employees are yet to receive government assistance,” he added.