THE Philippines’ unemployment rate could hit double digits this year, as the coronavirus crisis batters the economy.
“We are seeing from our surveys that unemployment will likely be double digit. We are waiting for second quarter LFS (Labor Force Survey),” National Economic and Development Authority (NEDA) Acting Secretary Karl Kendrick T. Chua told BloombergTV on Friday.
Philippine Statistics Authority (PSA) will release official data on June 5.
In 2019, PSA reported unemployment rate declined to 5.1% from 5.3% in 2018, its lowest level recorded in more than a decade or since 2005. The size of the labor force was estimated at 44.7 million last year.
Mr. Chua expects the country to slip into a recession this year. A recession is where two consecutive quarters of gross domestic product (GDP) contraction are recorded.
The second quarter GDP is expected to be worse than the -0.2% recorded in the first quarter, as the enhanced community quarantine (ECQ) in Metro Manila continues through end-May.
Mr. Chua said a hint of recovery should be felt in the second half as the country gradually reopens more parts of the economy, especially Metro Manila.
“By next week, we’re seeing the two thirds of the country in a relaxed quarantine, opened up, so I think we have a very good chance for a quick recovery starting in the second half,” he said.
Despite the grim outlook, Mr. Chua said the government is “ready to address” the “temporary shocks” in employment rates after rolling out the P200-billion cash aid program to poor families and the P51-billion wage subsidy program for employees.
He said the resumption of construction works for infrastructure projects once lockdown is lifted will serve as the “key” to the country’s recovery.
NEDA’s recent survey showed more than 2.2 million estimated jobs were lost as around 75% of the affected businesses were forced to close due to lockdown measures.
S&P Global Ratings earlier projected that the country’s jobless rate could hit 6.8% this year.
The inter-agency Development Budget Coordination Committee (DBCC) projected a two to 3.4% GDP contraction this year as the economic impact of the lockdown and pandemic is seen to reach P2 trillion.
In that same interview, Mr. Chua said among the programs included in the proposed recovery plan will include a time-bound, targeted equity infusion to large firms hardest hit by the crisis “to match whatever the bank will lend them.”
Without citing details, Mr. Chua said the program will also include conditions to “address the problem faster and minimize the fiscal risk for the government.”
Finance Secretary Carlos G. Dominguez III earlier said the government will need an additional P130-P160 billion to finance the programs under its three-phased recovery program. — Beatrice M. Laforga