Hike ayuda and labor budgets amid over 20M in informal work — IBON

September 8, 2022

by IBON Foundation

Research group IBON said that more and more Filipinos are forced to make do with informal work given the lack of better jobs. Yet, the Marcos Jr administration has cut the 2023 budgets for ayuda and labor, IBON noted, also amid high prices and a weak economy. It should ensure substantial funds to keep vulnerable workers and their families from falling into deeper poverty and to help them recover, said the group.

The Philippine Statistics Authority (PSA) highlighted somewhat improved employment data in July 2022 compared to June 2022. The number of employed persons grew by 800,000 to 47.4 million from 46.6 million. Unemployment declined by 388,000 to 2.6 million from around 3 million. But underemployment grew by 655,000 to 6.5 million from 5.9 million.

IBON said that comparing July 2022 labor figures to those pre-pandemic gives a better picture of the country’s jobs situation and shows that most of the jobs created are poor quality. This also means that many Filipinos lack the luxury of looking for better work and have to settle for what’s available.

Comparing labor force data in July 2022 with data in January 2020 just before the pandemic hit, the number of employed grew by 4.8 million from 42.5 million. But the group noted that by hours worked, over half (54.7%) of the jobs created in that time period were part-time. Those working less than 40 hours increased by 2.7 million from 13.4 million to 16.1 million. Those with a job not at work grew by 141,000 to 474,000 in July 2022. Full-time workers or those working 40 hours and over also increased by 2.1 million but was not enough to offset the number of part-time workers.

By class of worker, the number of Filipinos in work that tends to be informal or irregular has also increased. From January 2020 to July 2022, the number of self-employed grew by a huge 1.8 million from 11.1 million to almost 13 million, unpaid family workers by 1.1 million from 2.6 million to 3.7 million and employers in own family-operated farm or business by 269,000 from 1 million to 1.3 million.

IBON estimates that 20.1 million or 42.4% of jobs as of July 2022 are outright informal work made up of domestic help, those employed in small family farms or businesses, self-employed and unpaid family workers. This is an increase of 3.4 million since January 2020 and does not even cover informal workers in private establishments.

A comparison between July 2020 and pre-pandemic July 2019 labor force figures tells almost the same story. Employment increased by 4.9 million from 42.5 million in this period. But by hours worked, those working less than 40 hours grew by 2.8 million from 13.3 million in July 2019. This means almost 57% of the jobs created were part-time. Those with a job not at work increased by 145,000 from 328,000, as well as full-time workers by almost 2 million from 28.9 million.

By class of worker from July 2019 to July 2022, there were also increases in the number of self-employed (by 1.4 million), unpaid family workers (by 1.1 million) and employer in own family-operated farm or business (by 82,000). For this period, IBON estimates the number of outright informal workers increased by 2.8 million.

The group said that the jobs situation could get worse if the Marcos government persists in slashing funds to ayuda and social assistance programs in the 2023 national budget. For instance, despite the growing ranks of informal workers, it has proposed cuts to important worker and livelihood ayuda budgets for the Tulong Panghanapbuhay sa Ating Disadvantaged or Displaced Workers (TUPAD) Program (by Php10.9 billion), the MSME Development Program (by Php1.2 billion), the Small Business Corporation (by Php500 million) and the Agricultural Competitiveness Enhancement Fund (by Php115.3 million).

Government has also made cuts to the labor department budget particularly to key programs that facilitate employment and protect workers and their welfare, said IBON. For instance, allocations for the Department of Labor and Employment – Office of the Secretary (DOLE-OSEC) were cut by 33.1% or Php11 billion in the proposed 2023 national budget. This was largely due to defunding of the Employment Facilitation Program (by 13.5% or Php122.3 million) and the Workers Protection and Welfare Program (by 37.1% or Php11.1 billion).

IBON said that the worsening jobs crisis coupled with increasing poverty and high prices are clear red flags that the Philippine economy is far from recovered. Instead of being dismissive and insensitive, the Marcos government should not slash but inject even more 2023 budget funds into ayuda and small business and producer support as well as important labor programs that will cushion vulnerable Filipino workers and their families and help them and the economy recover.