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Jobs crisis continues, informal work worsens

by IBON Foundation

Despite economic managers’ claims, the country’s jobs situation is bleak and far from returning to pre-pandemic levels, said research group IBON. Millions of Filipinos are still struggling to find work or turning more and more to informal jobs and self-employment to survive. The group said that substantial ayuda is urgently needed and that Congress should hold a special session to ensure the immediate allocation and distribution of funds for emergency aid.

IBON said the latest labor force figures show that the 3.7 million unemployed in May 2021 remains higher by 1.3 million than in January 2020 before the pandemic. The 2.2 million increase in employment is not enough to accommodate the additional 3.5 million Filipinos in the labor force, still leaving over a million unemployed. The number of underemployed has only decreased by just 807,000.

The employment increase also hides a significant decline in the quality of work and incomes as the country remains battered by the ongoing health and economic crisis, said the group. Millions of Filipinos are increasingly resorting to informal self-employment to make a living any way they can.

IBON noted that, by class of worker, the number of wage and salary workers declined by 131,000 from January 2020 to May 2021. This is mainly due to the 711,000 drop in those that worked for private establishments, likely from closures and retrenchments in micro, small and medium enterprises (MSMEs).

The number of Filipinos entering informal self-employment and unpaid work is also worsening, the group said. Self-employed work without any paid employees climbed to 12.7 million (1.6 million increase) from 11.1 million in January 2020. Unpaid family workers also rose to 3.6 million (932,000 increase). Employers in own family-operated farms and businesses however dropped to 761,000 (241,000 decrease) from about one million – an indication that small businesses and farms have been unable to cope and are shutting down amid the pandemic crisis.

IBON stressed that the number of employed by hours worked also reveals how bad the informal employment situation has gotten. Those that worked part-time went up by 3.2 million to 16.7 million, while those that worked full-time fell by 1.3 million. Those considered as “with a job, not at work” increased by 273,000 to 606,000.  The increase in part-time workers and those with a job but not at work can also be attributed to the rising number of self-employed and businesses implementing reduced workdays and hours.

More and more Filipino workers are entering sectors that are known to be low-paying and irregular, the group noted. Employment in wholesale and retail trade increased by 1.6 million to 10.2 million and in agriculture by one million to 10.6 million. Economic growth in these two sectors however continued to contract in the first quarter of 2021 – agriculture contracted by 1.2% and trade by 3.9%. This strongly implies lower sectoral incomes made worse by overcrowding.

The rise in part-time employment in these sectors also reflects the irregularity of work, said IBON. The number of part-timers grew by 1.1 million to 3.2 million in trade and by 889,000 to 7.2 million in agriculture. 

IBON said that with an increasing number of Filipinos struggling to support themselves amid poor job prospects and falling incomes, substantial aid, subsidies and support are urgently needed. It is time for the government to take immediate steps in providing these and prioritizing the welfare and interests of millions of vulnerable Filipinos. The group said it can start by heeding people’s demand for a special session to ensure the speedy passage of legislation that will ensure the immediate release of funds and distribution of ayuda.

There’s money for bigger Bayanihan 3: Economic managers just refusing to give more — IBON

by IBON Foundation

There is more than enough money for bigger emergency aid and stimulus in Bayanihan 3 if only the economic managers prioritize ayuda, research group IBON said.

There are various sources that the government can immediately tap for a more meaningful Bayanihan 3, said the group.

These include at least Php217 billion in unobligated and unpaid obligated funds from Bayanihan 1 and 2, and realigning 2021 budget allocations from less urgent items.

The Php401 billion Bayanihan 3 stimulus bill sponsored by over 290 lawmakers has been passed on second reading at the House of Representatives.

Though a larger program than Bayanihan 2, the provisions for emergency aid remain paltry, said IBON.

The group said, for instance, that the Php1,000 emergency assistance given twice to each Filipino will mean that the average family in the badly-hit National Capital Region (NCR) will just get the equivalent of around half of the monthly minimum wage.

The NCR minimum wage is currently Php537 for an equivalent monthly rate of Php16,300.

The economic managers however have been blocking efforts to increase the aid that will be given to millions of distressed families and enterprises.

The government has not even certified Bayanihan 3 as urgent. The budget, finance and treasury departments have also yet to issue a certification on the availability of funds, a constitutional requirement for the passage of bills seeking funds appropriation.

IBON said that the problem is not where to get funding but rather the Duterte administration’s unwillingness to prioritize poor and pandemic-stricken Filipinos.

The group said that there are potentially hundreds of billions of pesos available in funding if only the government pushes the priority legislation needed.

Budget department data as of April 15 shows that there are still Php217 billion in funds from Bayanihan 1 and 2.

This includes a considerable Php158.4 billion that remains unobligated out of the Php653.4 billion in allotments.

Moreover, there is Php58.9 billion in unpaid obligated funds.

These are funds allocated for COVID response that have not yet been committed to a specific item or program (unobligated) or have been committed but not yet disbursed (unpaid obligated).

IBON also notes that there are Php5.9 trillion in revenues (Php2.9 trillion) and borrowings (Php3 trillion) estimated for 2021.

IBON stressed that the administration can realign budgetary allocations from items that are now less urgent, given critical pandemic-related needs, and even counter-productive.

The government can realign from the huge Php1.8 trillion allotted for debt service (Php1.3 trillion for principal payments and Php531.6 billion for interest payments), Php1.1 trillion for infrastructure, Php9.5 billion for confidential and intelligence funds, and Php19.1 billion for the National Task Force to End Local Communist Armed Conflict (NTF-ELCAC).

The group emphasized that the enormous health and economic crisis requires a proportionately enormous response.

This is particularly because the Duterte government’s ill-conceived protracted lockdowns are the biggest reason for the collapse in livelihoods and incomes of tens of millions of Filipinos.  

Bayanihan 3 can be a start to the  expansionary fiscal policy that IBON has proposed to jumpstart the economy.

The Duterte administration can readily find the funds for meaningful aid and stimulus if it wanted to, IBON said. After 420 days of the government’s poor and stingy response, Filipinos more than ever need a government with the political will and boldness to put the people’s needs first over the profits of a wealthy few. #

Gov’t hyping employment gains to avoid giving more ayuda, stimulus – IBON

The economic managers are overstating employment gains to cover up the harsh impact of their refusal to give more cash aid and meaningfully stimulate the economy, said research group IBON.

Latest labor force figures show that Filipinos are not regaining their jobs and incomes and, on the contrary, are desperately trying to make a living in whatever way they can.

“The seeming improvement in the jobs situation from the reported higher employment and lower unemployment is an illusion, said Sonny Africa, IBON Executive Director. “Many Filipinos have still not regained their full-time work and small businesses. They’re just trying to get by on informal and irregular work with likely low and uncertain incomes.”

Comparing March 2021 labor force data to January 2020 data before the pandemic and the start of endless lockdowns, IBON noted that while the number of employed increased by 2.8 million, the labor force also grew by 3.8 million. 

This means there was not enough work for those entering or returning to the work force, resulting in a one million increase in unemployment, said the group.

IBON also observed that these additional jobs are made up of mostly irregular and informal work.

Africa said that the clearest sign of this is the decline in full-time work (40 hours and over) by 550,000 to 28.2 million in March 2021 from 28.8 million in January 2020. The increase in the number of jobs was overwhelmingly of part-time work (less than 40 hours) which grew by a huge 3.2 million and of those ‘with a job, not at work’ which grew by 128,000.

Over half of part-time workers surveyed said they are working less than 40 hours due to variable working time or nature of work. This could be due to reduced work hours brought about by pandemic conditions and lockdowns.

The significant rise in self-employment is another indication that there is a lack of decent work. Africa said that the supposed employment gains are largely in ‘self-employed without any paid employee’ which grew by 1.7 million (to 12.8 million) and of ‘unpaid family workers’ which rose by a huge one million (to 3.6 million) in March 2021.

Meanwhile, the 28.1 million wage and salary workers in March 2021 is only 333,000 more than the 27.8 million in January 2020.

These are aside from some 206,000 employed in small family businesses which have shut down between January 2020 and March 2021, as indicated by the fall in ’employers in own family-operated farms or business’.

Africa said that this may be due to how micro, small and medium enterprises (MSMEs) are getting scant support from the government, especially informal and unregistered MSMEs.

Africa also said that household incomes have fallen so low after over a year of lockdowns that more youth and otherwise retired elderly are seeking work to supplement household incomes.

The labor force participation rate of age groups 15-24 years old and 65 years old and above increased by 2.3 percentage points and 2.7 percentage points from February 2021 to March 2021, respectively.

According to the Philippine Statistics Authority, these two age groups largely contributed to the increase in the labor force during this period.

Recovery is stifled by the economic managers refusing to give more ayuda, improve the welfare and increase the purchasing power of households, and stimulate small businesses and the national economy, said Africa.

The real value of the minimum wage measured at 2012 constant prices also continues to fall –  from Php468.06 in June 2016 at the start of Pres. Duterte’s term to just Php434.47 in April 2021 –  and is as low as almost a decade ago (Php434.38 in December 2011).  

Three out of four Filipino households do not even have any savings to fall back on, he said.

Africa said that the persisting economic crisis will become even clearer when the first quarter gross domestic product (GDP) figures come out next week.

He said, “We will likely see tepid economic growth at most despite the so-called improved employment situation. This will just underscore how poor the quality of jobs remains and how shallow the economic rebound is.”

IBON said that the government can arrest the problem by giving much more emergency cash assistance. This will not just improve household welfare but also boost aggregate demand and spur more rapid economic recovery.

The multiplier effects from this will be much greater and more immediate than the same amount going to grandiose import-intensive infrastructure projects, debt servicing, and human rights-violating counterinsurgency, said the group. #

DOLE rejects one of Debold’s last schemes; KMU hails stoppage of ‘evil attempt’

General Debold Sinas may not get everything he wants after all as the Department of Labor and Employment (DOLE) rejected the implementation of one of his last projects as outgoing chief of the Philippine National Police (PNP).

In a letter, DOLE secretary Silvestre Bello III dismissed as additional red tape Sinas’ proposal for the imposition of the National Police Clearance System (NPCS) on everyone who wishes to transact with the department.

“[R]equiring DOLE’s clientele to secure a police clearance issued by PNP’s national headquarters to avail of our services will do more harm than good,” Bello told Sinas.

The labor secretary explained that in a rapid survey he ordered in response to the general’s request, 94 percent of employers and workers are not in favor of the PNP’s latest scheme.

“It is a form of red tape to all and an additional financial burden to many,” Bello said.

The labor secretary also explained that the NPCS has no legal basis and may in fact violate the Constitution, the Labor Code and other laws.

Labor secretary Silvestre Bello III’s rejection of police chief Debold Sinas’ proposal.

Sinas, controversial for his violation of the government’s pandemic lockdown protocols during his 55th birthday celebration in 2020, retires on Saturday, May 8, on his 56th birth anniversary.

Sinas’ tenure as PNP chief has also been widely condemned for brutal counter-insurgency drives nationwide that killed civilian activists and arrested scores of others with unvarying illegal weapons and explosive charges.

Despite numerous complaints however, President Rodrigo Duterte refused to have his PNP chief investigated and has in fact publicly exonerated the controversial general.

‘Revenue generation’

In a March 10 letter, Sinas informed Bello of the PNP’s NPCS and proposed that the DOLE require a national police clearance for all who wish to transact with the department.

Sinas justified the NPCS scheme as the PNP’s effort to make police clearances more effective.

“For the longest time, the PNP has been issuing Local Police Clearance (LPC) nationwide to determine if an individual has any record. In the issuance thereof, however, the same has little impact on the aforesaid primary mandate of the PNP considering that more focus is being made on income or revenue generation,” Sinas said.

The controversial police chief revealed that only the local government units benefit from the revenues collected from issuing LPCs.

Sinas’ controversial NPCS proposal rejected by 94 percent of workers and employers.

Sinas also admitted that the sources of information, scope, period of validity, processing time and format of the LPC vary in every local police station nationwide.

“Since the record checking is localized, an individual may be cleared in one jurisdiction although he has criminal records in other places,” Sinas further admitted.

‘Blatant transgression’

Labor federation Kilusang Mayo Uno (KMU) expressed appreciation for Bello’s decision, noting however the labor department should not have dignified Sinas’ proposal with a survey.

“It is uncalled for. It should have been junked outright and immediately at an early stage. It is incorrect for the DOLE to even subject the matter to a survey,” KMU chairperson Elmer Labog told Kodao.

Labog said the PNP’s attempt to require workers to seek clearance prior to being able to transact business with DOLE is a “blatant transgression” of workers’ rights that included the right to privacy, self-organization and freedom of association.

“It reeks of arrogance and…militarization of the bureaucracy,” Labog said.

The survey ordered by Bello.

“The…proposal is a slap to these (are basic worker’s rights). Why must we ask for permits from the PNP? What are those ‘transactions’? It is vague like any other fascist scroll such as the Anti-Terror Law. [It is another] tool for harassment at intimidation of the workers,” KMU said in an earlier April 21 statement.

The KMU said workers actively rejected Sina’s proposal through Bello’s survey.

“We laud workers for standing against this directive and using the survey to pressure Bello to junk Sinas’ proposal,” the labor group said.

“Sinas leaves his post with bloody hands and even attempted to leave something evil against workers behind. It’s good that a united workers’ voice stopped him,” KMU said. # (Raymund B. Villanueva)

Ayuda urgent: Jobs crisis still worse than before pandemic — IBON

Government claims of the employment situation improving in February 2021 compared to pre-pandemic January 2020 are unfounded, research group IBON said.

The so-called increase in employment is just Filipinos desperate to make a living in any way they can. This makes the need for substantial cash aid even more urgent, the group said.

The economic managers repeatedly claim that “we have surpassed our pre-pandemic employment level of 42.6 million in January 2020,” such as when the February 2021 labor force survey (LFS) results were released.

IBON said the LFS figures, however, clearly show that the jobs crisis existing even before the pandemic has only gotten worse upon the longest and harshest lockdowns in Southeast Asia.

Reported employment increased by 610,000, from 42.5 million in January 2020 to 43.2 million in February 2021. But this was far from enough for the labor force which grew by 2.4 million over that same period to 47.3 million, said the group, resulting in even greater unemployment.

IBON also noted that there are 12 million combined unemployed (4.2 million) and underemployed (7.9 million) Filipinos as of February 2021, which is much more than the 8.7 million in January 2020 (i.e. 2.4 million unemployed and 6.3 million underemployed).

The 1.8 million increase in unemployment in itself already indicates collapsing household incomes for millions of Filipino families, said the group.

Photo by R. Villanueva/Kodao

The marginal increase in employment should not be seen as a sign of any improvement because it masks a serious deterioration in the quality of work in the country, IBON said. Even less than before, so-called employment is not enough to give Filipino families the regular and secure incomes they need to survive.

By class of workers, the number of wage and salary workers fell by over 1 million and of employers in family farms and businesses by 72,000 from widespread lockdown-driven business closures and retrenchments. These are down to 26.7 million and 930,000, respectively.

IBON noted that jobless Filipinos were apparently driven to “self-employment” which bloated by 1.4 million and to being “unpaid family workers” which rose by 356,000. These increased to 12.5 million and 3 million, respectively.

By hours worked, the number of full-time workers fell by 2.9 million to 25.9 million. Those working only part-time however increased by 3.2 million to 16.6 million, and those “with a job, not at work” by 325,000 to 657,000.

IBON stressed that tens of millions of Filipinos are going hungry, most of all from not having the money to buy food especially from the lack of work.

The Php10,000 emergency cash assistance being demanded is all the more urgent to immediately alleviate hunger. The inflation-adjusted official food threshold as of March 2021 for a family of five is Php2,133 per week in the National Capital Region (NCR) and Php1,905 per week on average for the Philippines.

The latest Php1,000 token cash aid is glaringly not even enough for food expenses, considering even that official food thresholds are ridiculously low to begin with, IBON said.

At the same time, a large fiscal stimulus is critical to arrest economic scarring, jump-start the economy, and genuinely improve employment on a wider scale, said the group. #

‘Isiwalat ang modus operandi ng pekeng pagpapasuko ng PNP’

“Ipinapanawagan ng KMU na ilantad at labanan ng mga manggagawa ang ganitong aktibidad ng rehimeng Duterte at mga ahenteng militar at intelligence nito laban sa kilusang-paggawa. Nananawagan kami sa lahat ng biktima ng ganitong atake na ilahad ang kanilang mga kwento at isiwalat ang modus operandi ng pekeng pagpapasuko ng PNP.” Elmer Labog, Tagapangulo, Kilusang Mayo Uno

‘Evil and crooked’: Councilor, employees unions condemn dismissal of 60 Bacolod employees

A Bacolod Councilor opposed the termination of 60 employees of the city’s water district, saying the move is a grave abuse of authority by the directors of the local water utility.

In a privileged speech Friday, January 8, Councilor Wilson Gamboa said the Board of Directors of the Bacolod City Water District (BACIWA) unjustly and illegally terminated the workers in collaboration with the private water utility company PrimeWater Infrastruture, Inc.

The local legislator was reacting to the Board’s decision to terminate the workers effective December 31 by declaring their positions “redundant” after the public water utility signed a controversial Joint Venture Agreement (JVA) with PrimeWater.

PrimeWater is owned by the family of Senator Cynthia Villar.

Gamboa said the firing of the employees hammered the final nail of a total “takeover” of BACIWA by PrimeWater.

“These members of the BACIWA Board of Directors believed that they are the absolute authority by issuing arbitrary, capricious, and illegal resolutions and orders which completely gave PrimeWater total supervision and control over its management, operations, collections, and the trampling of employees’ rights. Now, they have evolved as the henchmen of PrimeWater,” Gamboa fumed.

Gamboa said the BACIWA Board could not declare the workers’ positions as redundant when PrimeWater would hire private employees as replacement, including the fired employees who would be “reabsorbed” should they take Option 2 of the proffered retirement package.

The legislator also said the “evil and crooked” BACIWA directors failed to conduct proper consultation with the affected employees.

“[The workers’] rights and tenure must be protected against an unjust, inhuman, and illegal order of the Board of Directors of BACIWA who acted as the corporate carpetbaggers and collaborators of PrimeWater,” Gamboa said.

First dismissed government employees of 2021

Employees union president Leny Espina, who was among those dismissed, said the affected workers were barred from entering the BACIWA premises since Monday, January 4.

Espina said the union will continue to stage actions in front of the BACIWA office every day along with other Bacolod City supporters in protest of their dismissal and the takeover of the public water utility.

The Confederation for the Unity, Recognition and Advancement of Government Employees (COURAGE) and the Water System Employees Response (WATER) also launched a nationwide campaign to have the dismissed employees reinstated.

COURAGE National President Santiago Dasmariñas, Jr. said the dismissal violated the constitutional and legal rights of government employees to security of tenure.

He added that the dismissal was also meant to quell legitimate protests against the privatization of local water services.

“We ask the Duterte government to stop privatization of local water services and put laid off public sector workers back to work!” Dasmariñas said.

Ramir Corcolon, WATER secretary general, asked the government to put the welfare of people above business interests.

“Experience has shown that privatization of water only led to more expensive but still poor, or even poorer, water services. Greed should not reign over the right of the public to affordable and quality water services,” Corcolon said.

Water district unions and national agency employees unions all over the country also posted photos of solidarity activities in support of the BACIWA workers Thursday. #(Raymund B. Villanueva)

PH labor market rebounding but not recovering – IBON

In reaction to the statement of the National Economic and Development Authority (NEDA) upon the release of the recent labor force survey, research group IBON said that the labor market rebounding as lockdown restrictions are eased should not be mistaken as ‘recovery’. More than people returning to work, the term should mean returning to the same levels of employment as before. Recovery can only happen with substantial economic stimulus including sufficient government financial assistance or emergency subsidies to workers affected by the pandemic, IBON said.

The official unemployment rate according to the Philippine Statistics Authority (PSA) is 8.7% or about 3.8 million unemployed in October 2020. NEDA compares the October unemployment figure with those of previous quarters (10% in July and 17.6% in April) to show as a sign of recovery.

But IBON noted that the number of employed fell by 2.7 million to 39.8 million in October 2020 from 42.6 million in October last year. The group also noted that labor force participation rate (LFPR) has fallen to a remarkably small 58.7% in October 2020, causing the labor force to shrink by 933,000.

IBON estimated a different unemployment figure.According to the group, if LFPR in October 2020 stayed at its 61.4% level in October 2019, the labor force would be around 45.6 million, which is 1.98 million more than officially reported.

IBON added this 1.98 million, which it referred to as invisibly unemployed, to the officially reported 3.81 million, bringing the real number of unemployed to 5.79 million and the real unemployment rate at 12.7 percent.

The group also said that though underemployment rate fell to 14.4%, this does not indicate that the quality of work has improved. This is most likely, IBON said, because many of the employed have stopped searching for work due to pandemic conditions and lack of job prospects with many small businesses closing down.

The group pointed out that the inability of the economy to recover thus affecting job creation is hugely due to the lack of a substantial economic stimulus. This pertains to government spending that can arrest economic decline through increased or revitalized economic production and strengthened consumers’ purchasing power.

But government’s response is too little for such a huge economic decline, IBON said. The Php165.5-billion Bayanihan 2 is niggardly for urgent attention areas such as health system recovery, financial aid to vulnerable sectors and support for agriculture and small businesses. IBON also hit the 2021 proposed national budget, that except for tokenistic allocations, is no longer providing socioeconomic relief to workers and financial assistance to agriculture and MSMEs.

Meanwhile, government’s economic managers are determined to retain the huge Php1.1 trillion budget allocation for infrastructure development as their main stimulus program and to propose corporate income tax cuts through the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill.

Recovery cannot happen with such government neglect of labor and the economy, IBON said. Scrimping on meaningful economic stimulus prevents the health system to cope with the pandemic and the workers to return to work. It also leaves behind the more basic economic sectors of agriculture and domestic manufacturing in creating more meaningful jobs, IBON added.

The economy may indeed recover from its collapse. But like such ‘recoveries’ of the past when no meaningful government intervention took place, it would take a while, if at all, for jobs and incomes to be fully recovered and improved, said the group. #

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Kodao publishes IBON articles as part of a content-sharing agreement.

Bayanihan 2 and 2021 budget leave millions of unemployed behind

by IBON Media & Communications

The latest July 2020 labor force survey (LFS) figures confirm the inadequacy of the Duterte administration’s response to what is developing into the worst jobs crisis in the country’s history. The Bayanihan 2 and the proposed 2021 national government (NG) budget give the appearance of assistance but will leave millions of jobless and distressed Filipinos behind. The level of aid for the people is much too small for the magnitude of the crisis at hand.

This year will likely see the biggest contraction in employment in the country’s history. Employment contracted by 1.2 million in July 2020 from the same period last year, falling to 41.3 million employed according to the latest LFS. This comes after the reported 8.0 million year-on-year contraction in April 2020. For the whole of 2020, IBON estimates employment to fall by 2-2.5 million from last year. This will far surpass the previous record employment losses of 833,000 in 1980 and 821,000 in 1997.

The crisis of joblessness is unprecedented. The official unemployment rate of 10% in July 2020 brings the average of the first three rounds for the year so far to 11% which is not likely to improve much even when the October round results come out. The 4.6 million officially reported unemployed in July 2020 is already 2.1 million more than in the same period last year.

Adding 4.6 million unemployed and the 7.1 million underemployed means that the government acknowledges at least 11.7 million Filipinos jobless or looking for additional work to increase their incomes in July 2020. IBON however has long pointed out that official unemployment figures since 2005 tend to underestimate the real number of unemployed Filipinos by around 2-2.5 million annually.

Moreover, the labor department has already reported 604,403 overseas Filipino workers seeking assistance of which only a little over one-third (237,778) have been helped so far. In a press briefing today, they also said that they expect another 200,000 to need help until the end of the year.

Official figures likely underestimate the extent of the problem. However, even going by these, the inadequacy of the government’s response to directly help the people is clear.

Bayanihan 2 promises Php5,000-8,000 in emergency cash subsidies and other assistance for poor households, displaced workers and OFWs. However, only Php19.2 billion is budgeted for cash subsidies and other assistance which is just 3.8 million beneficiaries at most. The aid will also just be a mere Php37-60 per person per day for a month or even less than the official Php71 poverty threshold.

In the proposed 2021 NG budget, there is no provision for substantial emergency cash subsidies beyond existing social welfare department programs such as the Pantawid Pamilyang Pilipino Program (4Ps) and smaller programs. Indigent pensioners are not getting any increase in their pensions. Even the labor department’s Tulong Panghanapbuhay sa Ating Disadvantaged/Displaced Workers and Government Internship Program (TUPAD-GIP) program gets just a meager Php3.2 billion increase to Php9.9 billion.

Micro, small and medium enterprises (MSMEs) are also not getting the focused assistance that they need. There are 997,900 MSMEs employing 5.7 million workers aside from hundreds of thousands more unregistered establishments with millions more workers. Formal sector establishments had over Php21 trillion in expenses in 2018. In July 2020, the DTI said that 26% of companies they surveyed closed operations and another 52% were only partially operating. Those partially operating also said their income was down by 90 percent.

The Php77.1 billion Bayanihan 2 budget for production and enterprise support will cover only a small fraction of workers in MSMEs, and is even shared with farmers and fisherfolk. In the proposed 2021 NG budget, the MSME Development Program is even getting a Php416 million budget cut to just Php2.3 billion. The budget of the Small Business Corporation (SBC) stays the same at just Php1.5 billion.

In their press briefing today, the economic managers projected a 12% unemployment rate in 2020 (mid-point of the Development Budget Coordination Committee estimate of 11-13%) improving to 6-8% in 2021 then 4-5% in 2022. These optimistic projections cannot materialize without substantially increasing aggregate demand through meaningful cash transfers to millions of distressed households and more support to hundreds of thousands of struggling MSMEs.

Tens of millions of Filipinos and their families will continue to suffer for years without a genuine stimulus program overriding the misguided fiscal conservatism and reckless optimism of the economic managers. #

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Kodao publishes IBON articles as part of a content-sharing agreement.

Official unemployment figures understate historic jobs crisis

by IBON Media & Communications

IBON said that the unemployment crisis is actually even worse than official figures show.

The group estimates that the real unemployment rate is likely around 22% and the real number of unemployed around 14 million.

The 20.4 million real unemployed and underemployed today is the worst crisis of mass unemployment in the country’s history.

The Philippine Statistics Authority (PSA) reported 7.3 million unemployed and 6.4 million underemployed in April 2020.

As it is, this is the worst government-recorded unemployment (7.3 million) and combined unemployment and underemployment (13.7 million) in the country’s history.

IBON pointed out, however, that the technical definition of unemployment does not count as much as 4.1 million Filipinos who did not formally enter the labor force because of the ECQ and another 2.6 million that the revised unemployment definition since April 2005 stopped counting.

The drastic drop in the labor force participation rate (LFPR) to 55.6% is most of all due to the ECQ, said the group.

The jobless Filipinos who did not enter the labor force will not be counted as unemployed because the technical definition of unemployed requires them to be in the labor force to begin with.

If the LFPR had stayed the same at 61.3% in April 2019, there would be an additional 4.1 million in the labor force.

The methodology for counting the unemployed was revised in April 2005. Since then, jobless Filipinos who did not look for work in the last six months or are unable to immediately take up work are no longer considered unemployed and removed from the labor force.

This lowered officially reported unemployed Filipinos and stopped comparability with data from previous years.

The revised unemployment definition tends to underestimate the magnitude of unemployment by 35% and the unemployment rate by 3.3 percentage points.

An initial correction for this would mean an additional 2.6 million jobless Filipinos who should be counted as unemployed according to the previous definition, said the group.

IBON said that it is important to see historical trends in the country’s unemployment situation to get an accurate picture of the long-term implications of economic policies. Having data that is comparable over time will give a much clearer indication of the structural economic changes the economy is undergoing which will enable better policymaking. #

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Kodao publishes IBON reports as part of a content-sharing agreement.