Philippine state economists see unemployment staying elevated and more people remaining below the poverty line until 2022, as the coronavirus pandemic leaves scars on the economy.
The country's poverty rate is projected to average between 15.5% and 17.5% in 2021, likely near the 16.6% posted in 2018, officials of the National Economic and Development Authority (NEDA) said on Thursday, February 4, during the launch of the updated Philippine Development Plan (PDP).
Before the pandemic, the government's economic team aimed to reduce poverty to 14% of the population by 2022. The target was for the Philippines to be classified as a middle income country.
NEDA also noted that joblessness will remain elevated at around 7% to 9% by 2022.
This is roughly the same as the 8.7% unemployment rate posted in October 2020, and much higher than the pre-pandemic target of 3% to 5%.
Acting Socioeconomic Planning Secretary Karl Chua said there will be a surge of young people sending out job applications by 2022, as the first batch of K to 12 graduates and also college graduates are expected to look for work by then.
NEDA Undersecretary for Policy and Planning Rosemarie Edillon said that with more people expected to remain poor, hungry, and jobless, there is a need to support the poor through social protection measures like cash assistance.
Note, however, that the 2021 budget does not have provisions for financial aid, should a second wave of COVID-19 infections occur.
While social services, labor, and agriculture got increases from last year's appropriations, lawmakers earlier questioned if these would be enough in the context of the pandemic.
The government is aiming to rev up the economy through infrastructure projects, as well as retooling workers to fit the demands of the labor market. (READ: Philippines plans to build its way out of pandemic)
The updated PDP also puts emphasis on expanding access of startups, small businesses, and cooperatives to the digital economy, as well as infrastructure specific for agricultural needs.
Chua noted as well that tax cuts for companies, amid foreign investments hitting a record low, are poised to attract investors.
He noted that the tax reform measure should be appreciated in the context of other legislative measures, such as the proposed easing of foreign restrictions on businesses.
President Rodrigo Duterte's term ends in June 2022. His successor, who will be elected in May 2022, will have to address the lasting impact of the pandemic on the economy. – Rappler.com