Renewed lockdowns wipe out gains as jobless rate rises in April

MANILA, Philippines (Update 2, 11:37 a.m.) — A brief return to strict lockdowns to arrest an unexpected Covid-19 flare-up erased some gains in restoring jobs destroyed by the pandemic, as more Filipinos were unemployed in April.

There were 4.14 million Filipinos who were either jobless or out of business in April, up from 3.44 million people in March, the Philippine Statistics Authority (PSA) reported Tuesday. That translated to a jobless rate of 8.7%, rising from 7.1% in the preceding month.

The grim figure stalled a fragile recovery in the labor market seen in recent months after mobility curbs were retightened in Metro Manila and four nearby areas from late March to mid-April to contain a new surge of infections. In the capital, the jobless rate soared to 14.4% in April, equivalent to 875,000 unemployed people, from 8.8% in January, data showed.

It was a “temporary reversal” of gains, economic officials said, adding that the local job market is still better off now compared to last year when lockdowns were at their tightest. They said the government managed to balance health and the economy this time.

“For instance, instead of shutting down three-fourths of the economy, we allowed public transportation and more sectors to operate, but still subject to the minimum health standards,” economic officials headed by Finance Secretary Carlos Dominguez III said in a joint statement.

But Leonardo Lanzona Jr., labor economist at Ateneo de Manila University, disagreed, arguing that the government seemed to have not learned its lessons from past lockdowns. “The problem is that during this period, no strategy was developed to shore up the enterprises that had closed. As in the previous lockdowns, the government did not have a plan that can generate jobs in the face of a significant recession,” Lanzona said in an e-mail.

Not only people are losing their jobs, the quality of work available continued to deteriorate as more Filipinos looked for additional jobs to augment their income. PSA data showed the underemployment rate surged to 17.2% April from 16.2% in March. With inflation up, this may indicate Filipinos are barely sustaining amid hard times.

At the same time, data showed many Filipinos have entirely stopped job hunting either because of getting discouraged or lack of job opportunities. The labor force participation rate, representing people aged 15 years and above who are actively looking for work, shrank to 63.2% in April from 65% in March.

By sectors, the construction industry suffered the biggest drop in employment on a month-on-month basis, with 805,000 workers losing their job in April. The contraction poses a big problem for the Duterte administration’s recovery plan, which banks on big-ticket infrastructure projects to generate jobs and recharge the economy.

“Unless we see an adequate government strategy of restoring jobs and investments, I do not see any prospect of a quick and easy recovery,” Lanzona said.

Editor's note: Added comments from economic managers, analyst