SOCIOECONOMIC PLANNING SECRETARY KARL KENDRICK T. CHUA
FINANCE SECRETARY CARLOS G. DOMINGUEZ
BUDGET AND MANAGEMENT SECRETARY WENDEL E. AVISADO
JUNE 8, 2021
The first quarter of 2021 showed us encouraging results as we control the spread of COVID-19 and boost our efforts to reopen the economy. However, when infections spiked in mid-March 2021, the government decided to take a step back and impose the enhanced community quarantine (ECQ) and modified ECQ (MECQ) in the National Capital Region (NCR) Plus area from March 29 to May 15, 2021, to save lives from the virus and buy more time to further improve our health system capacity.
This resulted in a temporary reversal of our first quarter employment gains, which show the tight link between labor market outcomes and the level of quarantine restrictions. However, compared to last year’s ECQ, the overall labor market outcomes are substantially better as we took a more risk-based approach in imposing restrictions. 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. Our experience this year shows that we can reduce cases while helping people recover their jobs and income at the same time.
Labor force survey (LFS) results
As reported by the Philippine Statistics Authority, the unemployment rate in the country moderately increased from 7.1 percent in March 2021 to 8.7 in April 2021. This is significantly better than the record-high unemployment rate of 17.6 percent in April 2020 at the height of last year’s ECQ.
However, the impact of the ECQ and MECQ on unemployment is more pronounced in regions with stricter quarantine measures, further highlighting the sensitivity of the labor market to the quarantine level. NCR and Region IV-A (CALABARZON), where the strictest quarantines were imposed, posted the highest regional unemployment rates in April 2021 of 14.4 percent and 13.4 percent, respectively.
Meanwhile, the unemployment rate outside NCR continued its general downward trend, declining from 8.7 percent in January 2021 to 7.9 percent in April 2021. This reflects the gains from the safe reopening of the economy in the provinces.
At the national level, the underemployment rate also increased from 16.2 percent in March 2021 to 17.2 percent in April 2021, indicating the reduction in income during the ECQ and MECQ period. In fact, the underemployment rate in NCR increased sharply from 8.2 percent in January 2021 to 15.5 percent in April 2021 as more jobs shifted to part-time arrangements given capacity restrictions.
In addition, the labor force participation rate (LFPR) fell from 65.0 percent to 63.2 percent from March 2021 to April 2021. Given the higher unemployment rate and lower LFPR, 2.1 million jobs were lost between March and April 2021. The bulk of this was driven by construction (-0.8 million), agriculture (-0.6 million), and wholesale and retail trade (-0.5 million).
Nonetheless, total employment in April 2021 remained above pre-COVID-19 levels. While the economy lost 8.7 million jobs at the height of the quarantines last April 2020, the economy generated 9.4 million jobs or a net of 0.7 million jobs between April 2020 to April 2021. Improving the rate of job creation will be crucial in our recovery effort this year.
The recent imposition of the ECQ and MECQ was not wasted given the significant decline in COVID-19 cases in the NCR Plus area, where hospital bed capacity was sharply increased and the prevent, detect, isolate, treat, and recover (PDITR) strategy was further enforced. Given this progress, we are ready to take well-calibrated steps to achieve better health and job outcomes for the people. The government continues to implement its three-pillar strategy to ensure our recovery.
The first pillar is the further re-opening of the economy towards modified general community quarantine (MGCQ) or better, at the appropriate time, along with expanding the age group allowed to go out and gradually resuming face to face learning in the low-risk areas, all with the appropriate safeguards.
Our experience in the past year shows that strict adherence to the PDITR strategy is crucial in reducing cases significantly even as the economy reopens. A major effort is the implementation of the digital contact tracing system, which can reduce the period from detection to isolation from 7 to 5 days. According to epidemiological models, such a system can reduce COVID-19 cases by 51 percent. This is currently being implemented in Pasig, Mandaluyong, Valenzuela, and Antipolo cities. The Inter-Agency Task Force (IATF) for the Management of Emerging Infectious Diseases has approved the expansion of this system to the rest of the country and ensuring interoperability across apps and LGUs.
The second pillar is the timely implementation of the recovery package, consisting of fiscal, monetary, and financial interventions that amount to over 2.7 trillion pesos or 15.4 percent of GDP since last year. This includes the 2021 budget, the 2020 budget extension, the Bayanihan 2 extension, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, and the Financial Institutions Strategic Transfer (FIST) Act. Accelerating the pace of their implementation would bring forward the benefits that these measures intend.
Moreover, the urgent passage of the amendments to the Public Service Act, the Foreign Investment Act, and the Retail Trade Liberalization Act can complement our recovery package. Relaxing the restrictions on foreign capital will put the Philippines in a better position to compete for investments and bring in more and better job opportunities for Filipinos.
The third pillar is the accelerated implementation of the vaccination program. The IATF has issued Resolution No. 117, expanding the A4 vaccine priority group to include all workers who work outside their homes, including government employees. The added protection against COVID-19 will give our workers more confidence to go out and earn a living, while reducing virus transmission to their families.
With 27.7 million vaccine doses arriving from May to July 2021, we are confident that we can bring more Filipinos safely to work, inoculate 70 million Filipinos or the entire adult population by the end of the year, and recover strongly in the next two years.
 In this joint statement, national level data compares March and April 2021. Meanwhile, regional level data compares January and April 2021, given the sampling design.