‘Unemployment may ease in H2’
The government expects unemployment to ease in the second half as overall economic activity improves and infrastructure spending picks up, according to the Department of Economy, Planning and Development.
The Philippine government anticipates a slight improvement in unemployment rates during the second half of the year as economic activity strengthens and infrastructure spending increases, according to the Department of Economy, Planning and Development (DEPDev). DEPDev Secretary Arsenio Balisacan stated that a recovery in the labor market is expected, particularly in the fourth quarter.
Recent data from the Philippine Statistics Authority indicates that the unemployment rate increased to six percent in July, the highest level since early 2022 when it stood at six point four percent. The unemployment rate represented 3.14 million jobless individuals in July, surpassing the 2.59 million recorded in June and matching the figure from the same month last year.
Balisacan attributed the rise in unemployment to the slowdown in economic growth during the second quarter, which reached 2.3 percent, the weakest performance in five years. This decline in growth was largely driven by high inflation that reduced consumer spending and restrained public infrastructure projects due to the flood control controversy.
Despite the current challenges, Balisacan expressed optimism about labor market conditions in the coming months, predicting that economic activity will improve in the second half of the year, particularly in the final quarter. The improvement in public construction spending, which has been hindered by corruption issues and government scrutiny, is also anticipated to contribute to the recovery.
Experts such as GlobalSource Partners country analysts Diwa Guinigundo and Wilhelmina Manalac view the latest unemployment figures as an early warning sign, cautioning that the economy's growth rate may not be sufficient to absorb the growing workforce while inflation remains high. They emphasized that the government's priority should be to revitalize investment, improve productivity, and ensure that economic growth translates into better job opportunities and income gains for Filipinos.
Donald Lim, president of the Management Association of the Philippines, noted that businesses' hiring decisions are influenced by their outlook on the economy. Conservative hiring practices have been adopted due to the unpredictable and unstable economic conditions. However, Lim also pointed out that advancements in technology, such as artificial intelligence (AI), could potentially reduce the need for additional staff by enhancing productivity and creating new roles.
Nevertheless, Lim acknowledged that the Philippines' labor laws, which provide strong protections for employees' security of tenure, pose challenges for companies seeking to make immediate workforce adjustments. Additionally, the recent minimum wage hike in the National Capital Region may further complicate hiring decisions, particularly for small and medium-sized enterprises.
Written by urgent.news from Philippine Star Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
