Job creation and poverty alleviation will be a major challenge for the government next year as the Department of Finance (DOF) admitted that uncertainly about the economic recovery will remain until the pandemic is contained.
Based on the DOF’s “Macroeconomic Framework and General Fiscal Policies for FY 2022: Economic Recovery and Structural Reform,” unemployment rate next year may settle above its pre-pandemic level of 5.3 percent.
“In a base case scenario, the unemployment rate can still be within the range of 6.7 to 7.6 percent in 2022,” the DOF document dated August 9, 2021 said.
As of June, jobless rate was seen at 7.7 percent, similar to May’s level.
The DOF also said that pandemic would continue to weigh heavily on poor families despite the expected gradual improvement in poverty incidence in 2022.
“Poverty incidence may gradually improve but further measures are needed to reach the original target of 14 percent by 2022 which include transfers to the bottom 50 percent of the population,” DOF said.
Latest survey of the Social Weather Stations (SWS) conducted last June showed that 48 percent of Filipino families rate themselves as poor.
"Needless to say, COVID-19 is wreaking havoc in the country,” DOF said. “Despite the generally positive outlook on economic growth, unemployment rate, and poverty remains to be a major challenge for the economic managers.”
The health issue part of the crisis must be addressed first before the economy can effectively jumpstart again, the DOF pointed out.
The department further said that the economic managers will play the “supporting role” next year.
“While not the sharp end of the spear, economic managers have a delicate ‘balancing act’ to perform: make sure that the resources are available to help combat the epidemic and have the spare with which to turn the crank of the economy again,” DOF said.
“We have to keep our powder dry; our resources should outlive the virus,” it added. “This is a very delicate ‘balancing act’ to support the economy without going broke.”
However, the DOF said there will be limits to what a stimulus could do given that there are still so “many unknowns about the virus" and the nimbleness of its mutations.