DESPITE unemployment hitting a four-year high in July, the Department of Economy, Planning, and Development (DepDev) expects the holiday season to provide a boost to hiring in the coming months.
DepDev Secretary Arsenio M. Balisacan said stronger economic activity in the second half could support more hiring as businesses ramp up toward the year-end.
‘With the improvement of economic activity in the second half, especially in the fourth quarter, the labor market will also improve,’ Balisacan said in a recent interview.
Data from the Philippine Statistics Authority (PSA) showed the unemployment rate rose to 6 percent in July, the highest since June 2022, when the economy was still recovering from the pandemic.
For the first seven months of the year, the unemployment rate averaged 5.2 percent, already close to the lower end of DepDev’s 5.3- to 5.8-percent full-year forecast and above the government’s initial 4- to 5-percent target under the Philippine Development Plan (PDP).
The government earlier attributed the July increase to the surge in new labor-market entrants who were not immediately absorbed by the economy.
Balisacan said unemployment is unlikely to breach the upper end of DepDev’s forecast, citing an expected improvement in economic activity and the anticipated resolution of delays in public infrastructure projects by the third quarter.
The latest data from the Department of Budget and Management (DBM), however, showed the continued weakness in public infrastructure spending.
Infrastructure and other capital outlays fell by 34.1 percent to P98 billion in June from P148.8 billion a year earlier. Spending nonetheless increased by 22.4 percent from P80.1 billion in May.
For the first half of the year, infrastructure and other capital outlays plunged by 40.8 percent to P367.4 billion from P620.2 billion a year earlier.
AI won’t erode jobs
Meanwhile, Balisacan said the government does not yet see the growing use of artificial intelligence (AI) as a major threat to job creation.
He said consultations with information technology and business process management firms showed that AI could create opportunities for workers to move up the value chain, provided they are given the necessary skills.
Balisacan also pointed to the continued importance of human interaction in customer-facing work, where consumers may still prefer speaking with an actual person when automated systems fail to resolve their concerns.
He said this ‘human touch’ could give Filipino workers an advantage even as AI takes on more routine tasks.
‘If we succeed in upscaling them, I don’t think that, and this is supported by the industry itself, that they will be replaced,’ he explained.
To make this possible, Balisacan said the public sector must work closely with industries and other sectors to support workers’ upskilling and help them transition to higher-value jobs.