Fewer jobless Pinoys seen by next year

MANILA, Philippines — The labor market is expected to continue improving next year, with fewer Filipinos likely to be unemployed as the economy sustains its recovery from the pandemic.

Based on the Budget of Expenditures and Sources of Financing (BESF) data following the submission of the record P5.768-trillion proposed 2024 budget, the unemployment rate in the country is seen declining in the range of 4.4 to 4.7 percent.

This is significantly lower than the expectation of an unemployment rate of 5.3 to 6.4 percent this year.

The rate, however, is seen to inch up to 4.8 to 5.1 percent by 2025 before easing again to four to five percent a year later.

Leonardo Lanzona, labor economist and professor at the Ateneo de Manila University, said this is based on the assumption that the pre-pandemic unemployment rate will already be reached.

“Inflation is slowly being managed. So, in the longer term, prices are no longer going to rise as much as before,” Lanzona told The STAR.

Inflation has been on a downward trend for the past five months, with the central bank expecting the headline rate to return to the target band of two to four percent by the fourth quarter of the year.

Lanzona warned, however, that what is currently missing is an appreciation of the impact of digital technologies on the labor market.

“True, the pre-pandemic supply chains are resilient and have been largely restored. With increasing trade, the markets are being stabilized,” Lanzona said.

“However, the technologies are now becoming more labor-saving. Unless we provide skills and greater social protection, the labor conditions are unlikely to improve from where we are,” he said.

Latest data showed that the unemployment rate fell for the third consecutive month to 4.3 percent in May while the underemployment rate decreased to 11.7 percent.

Lanzona argued that it is crucial to continue to upskill workers while micro, small and medium enterprises should be linked to the large corporations that are already tied to the global value chains.

“This means that local resources need to be developed and be processed or manufactured at a larger scale to ensure that more and better jobs are being created,” Lanzona said.

The National Economic and Development Authority (NEDA) earlier said the government would continue to push for and implement reforms to improve the country’s business climate, especially for foreign investors, and help in sustaining current labor market gains.

NEDA noted that establishing an enabling regulatory environment to improve the ease of doing business and encouraging innovation remain top priorities to attract investors with the technology and resources to generate high-quality jobs.

The agency also urged Filipinos to enroll in upskilling and lifelong learning programs to prepare for the jobs of the future.