MANILA – The country’s chief economist remains optimistic about the prospects of economy and employment despite the setbacks brought by the coronavirus disease 2019 (Covid-19) pandemic.
In a virtual briefing Friday, Socioeconomic Planning Secretary Karl Kendrick Chua said gradual recovery is expected by the second half of this year as most parts of the country are in general community quarantine (GCQ), which opened up around 75 percent of the economy.
However, the gross domestic product (GDP) growth forecast for 2020 has not yet been revised and is still projected to contract by 2 percent to 3.4 percent.
“But so far, given the results that we have seen, it seems like the second quarter will still be hit hard and we can expect the gradual recovery to begin in the third and fourth quarter so that we achieve as low damages as possible for the full year,” said Chua, who is also the director-general of the National Economic and Development Authority (NEDA).
Inflation eases; employment, manufacturing down
The Philippine Statistics Authority (PSA) reported Friday that the inflation rate has eased in May to 2.1 percent from 2.2 percent in April 2020.
This is also lower than May 2019’s inflation rate of 3.2 percent.
“A number of reasons explain this. These include the continued implementation of the Rice Tariffication Law, which has brought down the price of rice by around PHP10 per kilo from the 2018 peak. In fact, rice inflation in May was negative 2.7 percent,” the NEDA chief said.
He added that the government’s effort to ensure the unhampered flow of goods and imposing price freeze during enhanced community quarantine (ECQ) has also helped to keep the inflation rate low and stable.
On the other hand, a high 17.7 percent unemployment rate was reported in the Labor Force Survey (LFS) for April 2020 mainly due to the impacts of the Covid-19 pandemic. This means 7.3 million Filipinos do not have jobs as of April 2020.
“This year, all over the world, it is really a setback. But we are coming up with concrete measures on how to, at the very least get back five million [jobs],” said NEDA Undersecretary Rosemarie Edillon in the same briefing.
Edillon added that as soon as the global value chain recovers, it will also provide additional opportunities, particularly for the electronics sector.
Meanwhile, the PSA reported that manufacturing output plunged in April 2020.
Monthly Integrated Survey of Selected Industries (MISSI) showed that the volume of production index plummeted by 59.8 percent in April 2020 from a contraction of 14 percent in April 2019.
The value of production index likewise dropped by 61.4 percent in April this year from a decrement of 11.8 percent in the previous year.
Getting back on track
Chua said the impacts of the Covid-19 pandemic are temporary and the government shall stay focus on achieving its target of lifting 16 million Filipinos out of poverty by 2022.
He recalled that the Philippines reached its target four years in advance as the poverty rate in 2018 was slightly lower than 17 percent, the poverty rate target for the end of this administration.
He cited two factors that will help shape the type of recovery that the people are seeking — the proactive policies of the government such as the Bayanihan Act, Social Amelioration Program, Balik Probinsya Program, and wage subsidy among others and the public’s cooperation to maintain minimum health standards.
“The combination of these factors suggests that there might be a temporary deterioration of poverty but I think given the policies in place, we are on track to still improve our poverty numbers,” Chua said.