WEAK GROWTH in the wake of the pandemic may not create jobs fast enough, potentially worsening inequality, according to the Institute of International Finance (IIF).
“(Weak growth) makes income inequality harder to address and debt tougher to service, among others. At an even more basic level, low growth may not create enough opportunities for job seekers,” it said in a report Wednesday.
The economy is likely to have contracted last year, with the gross domestic product (GDP) retreating by a revised 11.4% in the third quarter, according to the Philippine Statistics Authority (PSA) Wednesday. Fourth quarter and full-year data will be reported today, Thursday.
In 2021, economic managers are expecting GDP to grow between 6.5% and 7.5%.
The job market may only return to its pre-COVID levels by 2022, according to Union Bank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion, noting that some industries including services may even see a recovery in 2023.
“It is not that jobs will not come back, but they will come back slower than expected. Some jobs may not even come back altogether,” Mr. Asuncion said in an e-mail. —
Joblessness in October was 8.7%, equivalent to 3.813 million people unemployed, according to the PSA. This represents an improvement from the 10% unemployment rate in July, equivalent to 4.571 million jobless. The year-earlier figures were 4.6% and 2.045 million jobless.
Unemployment peaked at 17.6% or 7.228 million jobless in April, the height of the lockdown.
Asian Institute of Management Economist John Paolo R. Rivera said sustained low demand and restrictions on movement have continued to impact the workforce as enterprises are not yet at full operations.
“However, there are industries that are thriving particularly the BPO (business process outsourcing), offshore and shared services sector whose demand is now being driven by the faster recovery of other countries relying on this service,” Mr. Rivera said in an e-mail.
He said improved confidence by both business and consumers, appropriate easing of some business restrictions and the reduction in infection cases will be key to the recovery in jobs.
“Hence, the government can help soothe job market conditions if it can lay out a concrete national vaccination plan that may increase demand- and supply-side confidence in the market, thereby improving job market conditions,” Mr. Rivera said. — Luz Wendy T. Noble