The Philippines may see another round of job losses in May amid the quarantine restrictions placed to address the spread of the coronavirus disease 2019 (COVID-19) pandemic, according to the latest issue of the Market Call.
The report released yesterday said while some economic indicators point to a possible recovery, or at least an improvement from the first quarter level, the weak April employment data threaten the second quarter’s economic performance, through consumption-induced effects.
“The economy lost about 2.1 million jobs in April nearly offsetting the 2.18 million jobs created in March. We may see another round of job losses, albeit lower than what was recorded in April, to reflect the mobility restrictions imposed in May onwards,” the report said.
The Philippine Statistics Authority will report the labor force survey for May at 9 a.m. today.
To recall, the country’s unemployment rate rose to 8.7 percent in April, with the National Capital Region (NCR) posting its second highest jobless rate on record, following the imposition of the stricter quarantine measures in the NCR Plus area due to a spike in COVID-19 cases.
The PSA said the unemployment rate in April rose from the 7.1 percent posted in March.
However, it was substantially lower than the record high 17.6 percent in April last year, during the initial implementation of the enhanced community quarantine (ECQ).
The PSA estimated 4.14 million jobless individuals in April, up from the 3.44 million recorded in March. It was however lower by 3.09 million from the number of unemployed persons in April 2020, then 7.23 million.
The NCR Plus area, which comprises of Metro Manila and four provinces, was placed under ECQ from March 29 to April 11 and shifted to modified ECQ from April 12 to May 14.
From May 15, these areas were placed under general community quarantine, with restrictions.
Meanwhile, the Market Call report also said manufacturing activity appears to improve in May although supply constraints remain.
“Food prices may ease a little with meat prices likely to soften with the implementation of executive order 128. However, other food prices may have already adjusted downward and so the unabated rise in global crude oil prices may offset milder food prices,” it said.
“Huge increases in international shipping costs have added to producers’ concerns.
However, we expect headline inflation to settle below four percent by Q4 at the latest,” it added.
The report said with the economy still beaten down and inflation less a concern, the central bank won’t raise policy rates this year.
“Actually, it may surprise the market with further rate cuts since they still widely exceed the 91-day treasury bill yields,” it said.
