More poor, jobless as gov't drops ambitions to focus on pandemic repair
MANILA, Philippines (UPDATE 10:28 p.m., Feb. 4)— The Philippines is facing a long-lasting economic effect of the pandemic that would require the Duterte administration to devote its last years in office for repair.
Consequently, the government settled to restoring losses from the coronavirus last year until June 2022 and putting the economy back on growth path toward 2040, the National Economic and Development Authority (NEDA) said on Thursday.
“The long-term goal remains the same but the short-term goal has been updated towards a healthy and resilient Philippines,” Socioeconomic Planning Undersecretary Rosemarie Edillon said during Thursday’s launch of the revised Philippine Development Plan (PDP).
“The PDP has thus been updated to build on the gains in recent years and consider the imperatives for recovery and adapting to the new and better normal state of affairs,” she added.
As a result, more Filipinos are bound to fall below the poverty line. The poverty rate, which dropped to 16.6% of population in 2018, is set to average between 15.5-17.5% this year when a new round of survey is conducted. Poverty is measured every 3 years, and before the pandemic, government hailed the big slide in number of poor Filipinos from 22% in 2015.
The revised goal was down from 13-14% set by Duterte’s economic managers at the onset of their term, just before the health crisis derailed the Philippines’ path toward the fulfillment of the Ambisyon 2040 long-term goal. Edillon said the amended PDP aims to “steer the rest of the society” back on track.
That would not be easy however. With poverty set to remain elevated, joblessness will remain between 7-9% by 2022, which if realized, would be hardly changed from 10.4% last year. Before the pandemic, government was aiming for 3-5% unemployment figure.
Youth unemployment, or the percentage of 15-24 years old without jobs, will be higher at 14.5-16.5% this year, and further up to 20.5-22.5% next year. In October 2020, 19.4% of Filipino youths did not have work.
To be fair, Acting NEDA chief Karl Kendrick Chua said high jobless figures for young people would also be because of large number of graduates this year when the transition to 12 years of primary education would be completed.
Still overall, 15.5-17.5% of Filipinos would remain underemployed by next year, barely an improvement from 17.3% last year, NEDA said. Food inflation, which has accelerated in recent months, is forecast to remain stable on average at 2-4% until 2022.
All these would be a product of an economy struggling to pick up pace after last year’s historic 9.5% plunge. Under PDP, a conservative forecast of 6.5-7.5% growth was considered for this year and the next, the 2022 figure paling in comparison with the economic managers’ assumption of 8-10% set in December last year.
There should be no confusion however, Edillon said, since firstly, the PDP was drafted ahead of the December meeting and that the bigger projection indicates that the government is confident “we can surpass that target.”
By the time President Rodrigo Duterte steps down from office in June 2022, NEDA said the Philippines' GDP should have finally returned to "pre-pandemic level" characterized by its original projection of reaching middle-income level status by 2020 if not for the health crisis.
Apart from its own metrics, the government also has set the Philippines on course to rising in the UN’s Human Development Index, which measures more qualitative indicators of development such as access to clean water and education. The country is also targeting to place between “40th to 42nd” rank of the Global Innovation Index by 2022 from 50th last year, Edillon said.
The new economic blueprint will focus on prioritizing the health of Filipinos and “transforming the workforce” to help workers adjust to the new normal. To do this, digital infrastructure will be improved, while agriculture will be strengthened to ensure food security.
“The road ahead remains long and challenging. However, it also presents us with many opportunities,” Chua said.
Editor's note: Clarified pre-pandemic level as defined by NEDA
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