NOT all jobs lost during the pandemic are bound to return, according to an executive of the Washington-based multilateral development bank due to low confidence and high uncertainty, the World Bank Group.
In a World Bank Blog, Director of Development Policy and Partnerships Mari Elka Pangestu said jobs have started coming back after last year but the uptick is quite slow. She said firms reducing hours or wages now account for 32 percent of total, down from 44 percent early in the crisis.
In the country, data from the Philippine Statistics Authority (PSA) showed 34.9 percent worked for less than 40 hours in September when the average for 2020 was at 60 percent. Some 8.9 percent of workers were unemployed in September, slightly lower than the 10.3 percent recorded in 2020.
“The sluggish recovery in employment is not explained by increased automation or digital adoption levels—but rather, a still heightened sense of uncertainty among businesses,” Pangestu said.
“This suggests that, without public policy action, not all jobs lost during the pandemic may come back, even as sales trend back to their precrisis levels,” she added.
The uptick in business activities, Pangestu said, is also not enough to persuade firms to employ more people and even adopt digital solutions. She said this was mainly due to the financial troubles of many firms.
While 37 percent of firms may have recovered from the pandemic, 30 percent of the total, she noted, were “in arrears or likely to fall into arrears.”
Pangestu said governments must extend these companies help by injecting not only capital but also confidence. This can be done by timely communication of eligibility, duration, and objectives of assistance programs.
“This also means that we must continue to collect and analyze data on the impact of the crisis on businesses and policy responses amidst an ongoing pandemic to better understand what is needed, and monitor the effectiveness of the assistance program,” she said.
U-shaped recovery
Pangestu said, however, that it is encouraging to know that while sales were still 28 percent below prepandemic levels, it is significantly higher than the contraction of 41 percent last year, suggesting a U-shaped recovery.
Exporters are also recovering faster than other firms, she added. This, despite noting that their sales remain below prepandemic levels.
Earlier, PSA data showed the country’s GDP in the third quarter reached P4.429 trillion. National Statistician Claire Dennis S. Mapa said this is P295.1 billion higher than the third quarter 2020 GDP but lower by P207.8 billion than the second quarter of 2021.
Data also showed the GDP amounted to P13.323 trillion in the January to September period. This means, Mapa said, the economy was still 5.7 percent below its prepandemic growth.
He said in 2019, GDP in the January to September period reached P14.125 trillion—or around P801.219 billion higher than the GDP in 2021 during the same period.
The country’s prepandemic GDP in 2019 was also P1.421 trillion higher than the P12.7 trillion posted in the same period of 2020.
“For 2019, the first 9 months of 2019, our GDP was estimated to be 14.1 trillion. So comparing our nine months 2021 performance, versus the prepandemic of 2019, we are still down by about 5.7 percent,” Mapa explained.
Despite being below prepandemic level, Chua said GDP growth is on track to attain the high end of the government’s GDP targets this year, pegged at 4 to 5 percent by year-end.
Mapa said in order to attain the low end of the government’s target, the country’s GDP only needs to grow by 1.7 percent in the last quarter of the year. To achieve the high end of the target, the country needs a GDP growth of 5.3 percent.
Chua said the remaining eight months of the Duterte administration will see the government working toward making the country resilient to Covid-19.
He said the government is bent on implementing policies that will ensure the economy returns to the “path of rapid and more inclusive growth.”