Neda says K-12 graduates to crowd job market, raise jobless rate to 7-9 percent in 2022 | Inquirer Business
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Neda says K-12 graduates to crowd job market, raise jobless rate to 7-9 percent in 2022

By: - Reporter / @bendeveraINQ
/ 06:55 PM December 08, 2020

MANILA, Philippines—The influx of K to 12 graduates into the job market by the time the economy is seen still recovering from this year’s pandemic-induced slump will bloat the jobless rate to 7-9 percent in 2022, the country’s chief economist said.

In a report, the state planning agency National Economic and Development Authority (Neda) said the Updated Philippine Development Plan (PDP) 2017-2022 downscaled the 2022 unemployment rate target from the pre-pandemic goal of only 3-5 percent of the labor force unemployed during the year that President Rodrigo Duterte steps down from office.

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Last year, the unemployment rate fell to a record low of 5.1 percent as the economy sustained robust growth but the COVID-19 pandemic and ensuing lockdowns reversed these gains.

In a text message, Acting Socioeconomic Planning Secretary and Neda chief Karl Kendrick T. Chua attributed the projected higher jobless rate in 2022 mainly to the K-12 program, whose initial graduating batch that year will bloat the labor force population.

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“The main reason is the first-time graduates of K-12 in 2022 who will increase labor supply temporarily before normalizing in the following years as the economy adjusts,” Chua said. “Note that in 2016, we started the new school system so plus two years of senior high school then four years of college, so we’ll see the impact in 2022,” Chua added.

As a result, the Updated PDP 2017-2022 projected youth unemployment climbing to 20.5-22.2 percent in 2022 from 19.4 percent this year.

Also, Chua noted that “until we have reached herd immunity, some industries won’t fully normalize yet.”

Economic managers last week said the Philippines would remain under less restrictive quarantine early next year until such time that up to three-fifths of the population gets vaccinated with an effective and widely available coronavirus shot to end the pandemic and resume 100 percent of the economy, seen happening by end-2021 or early 2022.

For Chua, “opening more of the economy safely will reduce the impact on unemployment,” especially when coupled with apprenticeship and training programs.

The Updated PDP 2017-2022, which was awaiting approval by the Neda Board chaired by Duterte, aimed to create 1-1.2 million jobs in 2022.

This year, the four rounds of the quarterly Labor Force Survey (LFS) yielded a jobless rate averaging 10.2 percent:

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  • 5.3 percent in January
  • A  record 17.6 percent in April at the height of the longest and most stringent COVID-19 lockdown in the region
  • 10 percent in July
  • 8.7 percent in October

The Philippine Statistics Authority (PSA) earlier said the 2020 unemployment average was the highest since the government adopted its current definition of employment in 2005.

The PDP 2017-2022’s unemployment rate target for 2020 was kept at 3.8-5.2 percent, Neda said, even as the recession shed millions of jobs and shuttered thousands of businesses.

While the Philippines’ jobless rate eased in October, it was still higher than most of its Asian neighbors’ latest figures:

  • China’s 4.2 percent in September
  • India’s 6.7 percent in October
  • Indonesia’s 7.1 percent in August
  • Malaysia’s 4.7 percent in July to September
  • Thailand’s 2.1 percent in October
  • Vietnam’s 2.5 percent in September.

The Philippines lost a net of 2.57 million jobs this year instead of generating 900,000-1 million jobs under the PDP 2017-2022.

“The extensive impact of the COVID-19 pandemic has taken a toll on the government’s employment-related targets in the PDP 2017-2022,” Neda said. “This outturn warrants more aggressive policy actions to ensure that the revised targets will be achieved,” Neda said.

For Neda, “providing relevant and timely policies will be crucial to stay on track in improving employment profiles.”

These included:

  • More investments in climate-resilient infrastructure and technologies to mitigate the impact on jobs of natural disasters
  • Increasing safe and sufficient public mass transportation
  • Providing cash-for-work’ ramping up implementation of big-ticket infrastructure projects under the Duterte administration’s ambitious “Build, Build, Build” program
  • Retooling and upgrading skills of displaced workers, including former overseas Filipino workers (OFWs) who had to return home
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TAGS: Business, economy, Employment, jobs, NEDA, pandemic, planning
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