Covid-19 sent thousands of displaced workers to the informal sector
MANILA – With the Philippines having its longest economic expansion since 2015 characterized by increases in job creation as well as wage and salary employment on private firms growing more than 5% annually and unemployment of 4.6% in October 2019, the country has been shaken by the COVID-19 pandemic along with socioeconomic shocks.
Mr. Kelly Bird, Country Director for the Philippines at the Asian Development Bank (ADB) said the government responded quickly to mitigate the worse effects of the pandemic through a variety of programs including health, social assistance to the poor and middle-class families and to businesses.
“The Government has also implemented in the last 3-4 years a comprehensive set of major reforms including the Build, Build, Build Infrastructure Program, tax reforms, regulatory reforms, rice sector reforms that placed the Philippines in a very good position to return to economic growth about 6%,” he said at the Job Summit attended by multisectoral representatives.
He added although the unemployment numbers improved since its surge in Q2 in 2020, about 1.7 million wage and salary jobs in private establishments have been lost in the 12 months up to January 2021, and we have seen informal employment numbers swell as hundreds of thousands of displaced workers move into the informal sector.
Mr. Bird said while most are concerned with the COVID-19 induced negative, “longer lasting impacts on the labor market and that it may take time for wave and salary employment to recover even as the economy recovers.”
He attributed this to a slow recovery may lead to destroyed productive capacity and jobs with some sectors taking time to recover, especially tourism. He also saw businesses shifting to digital technologies thereby reshaping work and the pandemic may accelerate the shift to automation.
“Consequently, job seekers and unemployed workers may be out of work for longer periods and become less employable,” he surmised.
However, he said the recommendations from the labor and business groups as well as the programs from the National Employment Recovery Strategy which is up for discussion at the Job Summit “will help address these challenges.”
Mr. Bird said the ADB respondent quickly with a concessional financing of US$4.2 billion, said to be a record for the Bank where US$1.8 billion was for the government’s COVID-19 fiscal and health response.
“We also provided three grants amounting to US$10 million to establish a modern laboratory at the J. B. Lingad Hospital in San Fernando City, Pampanga with a capacity of 3,000 COVID-19 tests per day. We also provided food baskets to over 160,000 vulnerable households (or over 700,000 individuals) in Metro Manila during the ECQ last year, and education kits to poor children in remote areas to help them keep learning while face to face learning is restricted,” he added.
He disclosed the ADB approved a vaccine financing loan worth US$400 million co-financed with another US$300 million from Asian Infrastructure Investment Bank.
Mr. Bird added the ADB supports the Philippines economic recovery and employment as much of their US$3.5 billion lending program in 2021 “will support infrastructure projects that will create tens of thousands construction and related jobs in the Philippines.
“Our own estimates show that US$1 billion of infra investments create an additional US$1.5 billion in GDP,” he said. The projects include the Malolos Clark Railway project approved in 2019 with US$2.4 billion of civil works awarded last year. He added the EDSA Greenways project approved in 2020 with civil works contract up for award in Q2, the South Commuter Railway Project, Davao Modern Bus Project, Metro Manila Bridges Project as well as the Palawan Sustainable Tourism Development Project all for approval and awards this year.
The ADB will also assist the Department of Labor and Employment and TESDA for the Youth School to Work Transition Program this year to help the youth find employment, including DOLE’s flagship program JobStart Philippines which provided assistance to some 20,000 Filipinos in finding meaningful employment.
“We commit to working with the government and stakeholders in labor and industry to operationalize many of these recommendations through our upcoming programs and projects on infrastructure, employment and TVET,” he concluded.(Melo M. Acuña)
Mr. Kelly Bird, Country Director for the Philippines, Asian Development Bank (ADB Photo)