The National Economic and Development Authority (NEDA) still sees a “challenging employment situation” in the remaining term of the Duterte administration, amid an expected increase in the labor force and with the economy still reeling from the impact of the coronavirus disease 2019 (COVID-19) pandemic.
NEDA yesterday released the updated Philippines Development Plan (PDP) 2017-2022 which showed revised macroeconomic targets, as the government took into account the impact of the global health crisis.
“For the remaining plan period, the health and the resilience of Filipinos will be prioritized as the foundation for achieving the Ambisyon Natin 2040. As such, the PDP has been updated to build on the gains in the recent years and to consider the imperatives for recovery and adopting to the new and better normal state of affairs,” Rosemarie Edillion, NEDA undersecretary, said during a virtual briefing yesterday.
“Building on the accomplishments but also assessing the short, medium and long-term impact of the COVID-19 pandemic, the core indicators and the corresponding headline targets have been updated,” she added.
With respect to economic growth, Edillon said the updated targets for 2021 is for the economy to grow by 6.5 to 7.5 percent and to remain the same in 2022.
The updated figure is lower than the 7 to 8 percent target that was set in the original version of the plan, long before the pandemic happened. The updated PDP’s 2022 growth target is also lower than the 8 to 10 percent projection set by the inter-agency Development Budget Coordination Committee (DBCC) only in December last year.
“We think that we can surpass actually that (PDP) target. We have come up with this target early on as we were updating the PDP, but given recent developments, we at the DBCC are setting for ourselves a higher target and we think that we (can) grow much faster than the original PDP,” Edillon said.
On poverty incidence, the family income and expenditure survey will be conducted this year, with the data results expected to come out in early 2022.
Thus, Edillon said the poverty incidence target has been revised, with the government now targeting 15.5 to 17.5, from the original plan of 13 to 15 percent by the end of the administration’s term. Subsistence incidence is targeted to be anywhere between 5 to 7 percent, revised from the earlier target of 5 percent.
The unemployment rate targets for 2021 and 2022 are also revised to be between 7 and 9 percent, from the original plan of 3.4 to 5.1 percent this year and 3 to 5 percent in 2022.
Edillon said this implies that 2.4 million to 2.8 million jobs in 2021 and then between one million to 1.2 million jobs in 2022 are expected to be created.
“It will (still) be a very difficult labor market situation. With respect to the poverty incidence, this one actually tells us that we will need more of this social protection,” Edillon said.
“It will still be a very challenging employment situation. And we think that for 2021, and even 2022, it’s still about transforming actually the workforce, so that it will be ready for the challenges of the new normal,” she added.
Edillon said while the government expects a gradual recovery beginning late 2020 and then on to 2021, there will be a substantial increase in the labor force in 2022 as the first batch of the K-12 graduates will be graduating from college and joining the labor market.
“In 2022, we will have graduates from the first batch of the full K-12, and also the ones finishing college… so there is a big additional supply of workers and that explains why the unemployment would be temporarily higher, not only due to the effect of the pandemic,” Karl Kendrick Chua, NEDA acting secretary, for his part, said.
Edillon said as bulk of the labor force are among the younger age group, youth unemployment rate is expected to increase to 14.5 to 16.5 percent in 2021 and then from 20.5 to 22.5 percent in 2022. Previously, the youth unemployment rate was seen at 8.6 and 8 percent in 2021 and 2022, respectively.
“Our focus for the next two years is to build a healthy and more resilient Philippines as the basis or foundation for the future. Our goal remains the same: to bring Filipinos closer to a strongly rooted, comfortable, and secure life,” Chua said.
“To achieve this, the updated PDP’s strategies have been adapted to respond to the needs of today while preparing for the requirements of tomorrow. The task ahead is beyond thinking about what to do. It is more about coming up with ways on how we can do it together,” he added.
Meanwhile, in a separate press release, the Department of Finance (DOF) said to sustain growth, the country has to maintain and enhance its capacity, medical or otherwise, to manage the health risks posed by the virus.
“Such capacity could tilt the odds in what is apparently a life-versus-livelihood dilemma and make it more of a life-and-livelihood dual outcome, but probably at a lesser scale than before under a ‘new normal’ should there still be uncertainties about and risks posed by the virus,” the DOF said in its latest economic bulletin.
The DOF said from a macroeconomic fundamentals point of view, the pandemic found the Philippines in the “position of strength.”
“The story would have been different had this pandemic struck in the early 2000s when the country was still reeling from the deleterious effects of the 1997 Asian Financial Crisis,” the DOF said.
It added that together with the continuing infrastructure program, the passage of pending economic reforms will give the economy “a big shot in the arm and would have a knock-on effect on employment and real wages.”