COVID, digitalization to disrupt 18M jobs


    The Philippine labor market is threatened on two fronts: the new coronavirus disease 2019 (COVID-19) and the digitalization of industries also as a result of the pandemic.

    An August 2020 study of the International Labor Organization (ILO) showed 18 million workers in the Philippines are exposed to destructive digitalization and COVID-19 job disruption.

    The dim macroeconomic outlook for the country will only wipe out the gains achieved in recent years, the study said.

    The findings have taken into account the 17.7 percent unemployment rate as of April, a month into the enhanced community quarantine.

    The ILO said 10.9 million jobs face medium- or high-risk disruption due to COVID-19 with 900,000 manufacturing jobs exposed to the disruption brought by the disease.

    The study identified informal workers, youth, overseas Filipino workers (OFWs) and women as the most vulnerable to these disruptions.

    The study identified the high-risk sectors disrupted by COVID as manufacturing; transportation and storage; accommodation and food services; arts, entertainment and recreation.

    The medium-risk sectors include water supply and waste management; construction; wholesale and retail trade; information and communication; finance and insurance; real estate and professional and scientific services.

    Manufacturing sub-sectors that depend on value chain connectivity are likely to face medium- or high-risk of job disruption, ILO said.

    The study added job disruption is most severe in the electrical and electronic equipment subsector, as well as in garments, textiles and footwear

    On a positive note, some subsectors such as food products, wood products, chemicals, pharmaceuticals and print and reproduction of recorded media are less likely to face job disruptions.

    The ILO said some occupations are susceptible to destructive or transformative digitalization where the former totally destroys occupations that require skills which are substituted for by machines and the latter affects occupations without necessarily replacing them.

    Occupations are likely to collapse in the real estate sector and administrative and support service activities such as building caretakers, security guards and contact center information clerks and salespersons; in the accommodation and food services and arts, entertainment and recreation such as food service counter attendants, cashiers and ticket clerks; machine terrain occupations in manufacturing, transportation and storage such as electrical and electronic equipment assemblers; supply, distribution and related managers as well as as financial and insurance activities and professional and technical activities such as bank tellers and related clerks, debt collectors, general office clerks.

    Among vulnerable sectors, women account for 38 percent of total job disruption; with 4.1 million of them particularly in wholesale and retail trade as well as in accommodation and food service activities.

    Another As of July 26, more than 106,200 repatriated Filipinos had returned and now have to rely on domestic job opportunities.

    For young people, the COVID-19 crisis has resulted in multiple shocks: disruptions in education and training, disruptions to employment and income and increased job search constraints.

    Jobs of around 1.7 million young people aged 15 to 24 are at-risk for COVID-19 induced job disruption.

    The ILO noted curtailed domestic and international production will result in a reduction in labour demand.

    Firms may need to adopt cost-reduction measures which may involve reducing working hours or lay offs.