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The pandemic can be compared to a powerful typhoon or a calamity that left a trail of destruction in its wake. Like a natural disaster, Covid-19 put millions of Filipinos out of work, halted the transportation system, and closed many business establishments.
Restoring jobs for millions of Filipinos, along with the widespread distribution of vaccines, should be the country’s priority next year. We can only fully reopen and revive the economy if millions of Filipinos can get their jobs back.
Workers are the lifeblood of the economy. They keep factories moving, run small businesses and outlets, and fuel the economy through their purchasing power.
The pandemic has stripped many Filipinos of their jobs, exacerbating the problem of poverty in the process, and has kept many people, as well as students, away from hubs such as shopping malls, university movie theaters and city parks. attractions. These activity centers are the microcosm of the economy. They create jobs, feed the family of market players and keep the business cycle going.
Last week, the World Bank noted that some 2.7 million Filipinos would join the ranks of the poor this year due to the Covid-19 pandemic, job losses stemming from quarantine rules to contain the disease, and the recent series of devastating typhoons.
World Bank senior economist Rong Qian predicts that the Philippine economy will contract 8.1 percent for the full year, after contracting 10 percent in the first three quarters. The contraction of the economy simply means that there will be more unemployed and that it will slow down the pace of government programs to reduce poverty.
He noted that the quarantine and lockdown measures disrupted economic activity and resulted in a loss of income, a decrease in wage income, a slowdown in business activities and a drop in remittances.
“The poor and vulnerable are especially prone to significant welfare losses given their limited ability to manage risk,” he said. “The expected growth contraction in 2020 is likely to increase poverty in the short term, resulting in an additional 2.7 million poor people in 2020 compared to the 2019 estimates, measured against the poverty line of lower median income of $ 3.2 a day ”.
As I have been writing in this column before, we should reopen the economy even more given the discipline and health protocols that our population seriously observes. The generation and restoration of jobs will keep the government on track towards reducing the incidence of poverty in the Philippines.
The National Economy and Development Authority has already admitted that the government’s initial goal of reducing the incidence of poverty to 14 percent by 2021 from 16.7 percent in 2018 is no longer realistic due to the Covid-19 pandemic.
I fully agree with the Acting Secretary for Economic Planning, Karl Chua. The key to economic recovery and poverty reduction is to open up the economy further to recover lost income from the displaced.
The latest labor report reminds us of what an economic reopening can do in terms of employment. The unemployment rate in the country improved to 8.7 percent in October from 10 percent in July and 17.6 percent in April after the Philippines allowed more economic activities to resume.
Neda has admitted that the unemployment rate could have been lowered if the economy had become more open and enough public transportation had been allowed. But the latest unemployment rate as of October is still not encouraging: the number of unemployed is 2 million higher compared to the figure for the same period a year ago.
Roughly 3.8 million Filipinos were unemployed in October, up from 4.57 million in July and 7.23 million in April. However, the figure is still higher than the 2 million unemployed people in October last year, when the unemployment rate was set at 4.6 percent.
However, I still believe that the downturn in the economy and the loss of jobs along the way are not long-term problems. Our strong macroeconomic fundamentals – a manageable inflation rate, stable currency, high foreign reserves and skilled labor, and a young population – and a stable political climate will enable the nation to overcome the pandemic and achieve economic recovery soon.
But we must ease containment measures quickly and allow provinces and local government units to open their borders further to encourage domestic tourism.
We need to reopen the economy further as we increase vaccine distribution, with the generation of millions of jobs as our main guiding principle.
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