Philippines to Boost Investment Amid Rising Unemployment

By Erika Mae P. Sinaking THE GOVERNMENT will focus its job-creation efforts on improving the ease of doing business, through which it hopes to attract more investment, Malacañang said on Wednesday after the unemployment rate rose to 6% in July, its highest level in four years. “When an investor can secure the requirements needed more quickly, it becomes easier for the investor to enter and hire our countrymen,” Palace Press Officer Clarissa A. Castro told a news briefing, citing Economy Secretary Arsenio M. Balisacan. “The government is continuing its efforts to address the issue of unemployment,” Ms. Castro said, citing job fairs, the strengthening of public employment service offices, skills training, and support for micro, small and medium enterprises (MSMEs). The Philippine Statistics Authority reported that unemployment in July rose to 6% from 5.3% a year earlier, with the number of unemployed rising to 3.14 million from 2.59 million. “This is both an issue of progress and a challenge,” Ms. Castro said, citing the surge in the labor force with not enough jobs available for them. “The government continues to strengthen its efforts to address the unemployment issue,” she added, noting that many overseas Filipino workers had been repatriated from countries affected by the crisis in the Middle East. Reforms are also continuing under the National Education and Workforce Development Plan for 2026 to 2035, which is aligned with the ASEAN Mutual Recognition Arrangements for Qualification and Skills Certification, she said. She said the government is also looking at measures to help MSMEs, including possible tax breaks, to allow small businesses to expand and hire more workers. Asked to comment, former budget secretary Romulo L. Neri said the unemployment level was “not shocking” in the context of what he described as “economic weakness and the downturn in construction with the suspension of so many Department of Public Works and Highways (DPWH) contractors.” He said the labor market will “remain sluggish until after the government gets back its bearings on infrastructure spending.” He added that DPWH and its contractors “seem frozen” amid ongoing corruption investigations and Anti-Money Laundering Act-related bank account suspensions. Christopher James R. Cabuay, an associate professor of economics at De La Salle University, linked the uptick in joblessness to weaker capital formation, noting that manufacturing — a high-productivity sector — posted the steepest employment decline among industries, even as low-productivity sectors such as agriculture, accommodation and food services, and wholesale and retail trade added workers. “I expect these trends to continue; unfortunately, it all depends on how aggressive investment (capital formation) is,” he said in an e-mailed reply to questions. “This reflects the aggression of business/companies to expand, and therefore create jobs,” he added. Mr. Cabuay said the shift toward lower-productivity sectors was concerning because manufacturing and other higher-value activities have greater potential to raise productivity and wages.