‘Jobless data exaggerated’

Not reflective of true state of economy — Diokno

MANILA, Philippines — The record-high unemployment rate of 17.7 percent in April does not reflect the true state of the Philippine economy and the jobs market as it was a result of the lockdown imposed by the government to prevent the further spread of COVID-19, the head of the Bangko Sentral ng Pilipinas (BSP).

BSP Governor Benjamin Diokno said the jobless spike in April was grossly exaggerated as the Philippine Statistics Authority (PSA) conducted its latest Labor Force Survey from April 20 to May 16, or during the enhanced community quarantine period.

“It was more a result of the policy decision to save lives in response to the COVID -19 pandemic,” Diokno told reporters via Viber.

Malacañang imposed an enhanced community quarantine in Luzon starting March 16 to curb the spread of COVID-19. The lockdown was extended twice until it was eased to a general community quarantine last June 1.

“A big part of the economy was shuttered; the consequent rise in joblessness was state-induced,” Diokno added.

Data released by the PSA on Friday showed some 7.3 million Filipinos were jobless in April, translating to an all-time high unemployment rate of 17.7 percent versus 5.3 percent last January. The rate also surpassed the 10.3 percent unemployment rate in the country in 1998 at the height of the Asian financial crisis.

Diokno said he is confident the August 2020 Labor Force Survey to be conducted from July 20 to Aug. 15 would paint a different picture as the government has started to jumpstart the economy with the shift to a general community quarantine.

“I’m confident that the next jobs report due in August 2020 will show a starkly different picture. While the impact of the pandemic on the economy is broad-based, it is uneven across industries. The loss of jobs follows the same pattern,” he said.

The BSP chief pointed out higher job losses were in the services sector particularly wholesale and retail, transportation and storage, accommodation and food as well as the industry sector including construction and manufacturing.

On the other hand, he said the agriculture sector that was allowed to function under the enhanced community quarantine suffered fewer job displacements.

“Moving forward, as the containment measures are relaxed nationwide, job recovery is expected. But as job loss was uneven during the lockdown, so will job creation in the transition,” Diokno added.

According to the BSP, construction and manufacturing could easily be restarted, while some industries like air travel, hotels, tourism related firms could take sometime to restart due to risk aversion on the part of consumers.

“Some might even take much longer such as theatres, ball games, conventions, and others. Some jobs might be permanently lost while new ones emerge,” he said.

The BSP has deployed COVID-19 measures including the reduction of interest rates by 125 basis points to a record low of 2.75 percent, the lowering of the bank reserve requirement ratio, the P300-billion repurchase agreement with the Bureau of the Treasury, among others, that released about P1.1 trillion in additional liquidity to soften the blow of the pandemic.

Diokno reiterated that the central bank is committed to stave off prolonged and deeper economic contraction as the country’s gross domestic product (GDP) is seen shrinking by two to 3.4 percent this year before recovering strongly with a growth of eight to nine percent.

“We, therefore, reiterate our support for carefully coordinated actions with other government authorities, as well as pending stimulus bills in Congress aimed at responding to the evolving needs of the economy as it transitions into new economic realities amid the ongoing pandemic,” he said.