MANILA – The reopening of the economy and increased infrastructure spending are expected to further boost employment figures in the country, which recorded better results in March 2021.
The Philippine Statistics Authority (PSA) reported on Thursday that the unemployment rate fell from 8.8% last February to 7.1% last March, the lowest since the government implemented community quarantine. (ECQ) from mid-March 2020 to the end of April for Luzon. , and end of May 2020 for the National Capital Region.
While the latest report is a positive development, Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael Ricafort said it has yet to reveal the impact of the two-week ECQ in NCR More which began on March 29 and was extended until April 11.
He however highlighted the differences between the implementation of the ECQ in 2020 and this year, such as in public transport which was not paralyzed unlike in 2020. Thus, the impact of the strictest movement restrictions in last March is not as bad as last year.
“Thus, a further reopening of the economy after the shutdowns would provide a more structural and sustainable solution in terms of increased production, sales, incomes/livelihoods which also creates/implies more jobs/d jobs and more working hours,” he said.
But even with the shutdowns, Ricafort said increased government spending on infrastructure should support jobs.
He said the CREATE (Corporate Recovery and Tax Incentives for Enterprises) Act, as well as the historically low interest rates of the Bangko Sentral ng Pilipinas (BSP), are boons for the economy, as they are seen as further encouraging investments which in turn lead to an increase in labor requirements and an increase in economic activities.
“The unemployment rate could still gradually reach single-digit levels in about one to two years, consistent with the possible recovery of the broader economy in time for the presidential election year of 2022, when spending would increase, especially for infrastructure spending and other government projects a few months before the May 2022 elections and an increase in consumer spending during the campaign period, especially in Q1 (Q1) 2022,” he added.
Meanwhile, economic managers said the easing of movement restrictions and the requirement for the public to meet minimum health standards drove the employment rate down last March.
“Rising labor force participation and falling unemployment helped millions of Filipinos return to their jobs and incomes in March 2021,” they said in a statement.
Along with the drop in the unemployment rate last March, the PSA said the underemployment rate fell to 16.2% from 18.2% last February, “reflecting improved job quality”.
In addition, the labor force participation rate rose from 63.5% to 65% last March.
“These resulted in a net job creation of 2.2 million between February 2021 and March 2021, with the number of employed Filipinos increasing from 43.2 million to 45.3 million,” the statement said.
Economic managers expect the unemployment rate to rise slightly in April following the implementation of the ECQ in the latter part of March and the MECQ thereafter.
“However, the impact is expected to be less severe compared to April 2020 given our more risk-managed approach to current quarantines,” the statement added. (NAP)