THE government may miss its poverty incidence and unemployment targets in the medium term, according to the National Economic and Development Authority (Neda).
In a presentation at the House of Representatives on Tuesday, Socioeconomic Planning Secretary Ernesto M. Pernia said the country’s target of cutting poverty incidence nationwide may be missed if inflationary pressures are not addressed.
The government intends to cut poverty incidence to anywhere from 13 percent to 15 percent by 2022, from 21.6 percent in 2015; rural poverty to 20 percent from 29.8 percent; and subsistence incidence, 5 percent from 8.1 percent.
“We are hopeful that [Family Income and Expenditure Survey] results would be encouraging given the sustained economic growth and the moderate food inflation in 2016 [1.7 percent] and 2017 [3.2 percent]. However, this target may be at risk in 2018 if inflationary pressures are not addressed effectively and immediately,” Pernia said.
Pernia said cutting unemployment and underemployment targets have already been missed given the high youth unemployment and low job generation.
Under the Philippine Development Plan (PDP) 2017-2022, the government intends to reduce unemployment to 3-5 percent by 2022, from 5.4 percent posted
in 2016.
However, the actual unemployment rate was 5.7 percent in 2017, which is higher than the 5.1 to 5.4 percent target.
In the first semester of this year, unemployment was at 5.4 percent, or above the 4.7 to 5.3 percent full-year target for 2018.
Unemployment is expected to be reduced further to 4.3 to-5.3 percent in 2019; 3.8-5.2 percent in 2020; and 3.4 to 5.1 percent
in 2021.
In terms of employment generation, as of 2017, only 663,243 jobs were created. As of the first semester of this year, around 1.5 million jobs were created.
The number of jobs created last year was below the annual target of 0.9 million to 1.1 million new jobs created, while those created this year already exceeded the target for 2018.
Pernia said, however, that youth unemployment was at 11.9 percent as of October 2017 and even increased to 14.1 percent in the first semester of 2018.
This is higher than the baseline of 11.5 percent in October 2016 and the targets for the medium term, which aim to bring down youth unemployment to single digit.
The government intends to reduce youth unemployment from 11 percent in 2017 to 8 percent in 2022. By 2019, the government aimed to see the rate reduced to single digit to 9.8 percent.
Underemployment, which is an indicator for the level of quality of jobs, averaged 17.1 percent in 2017. It increased to 18.8 percent as of the first semester of 2018.
The government intended to
reduce underemployment from 16.5-18.5 percent to 16 to 18 percent in 2021; 16.9 to 18.9 percent in 2020; 17.4 to 19.4 percent, 2019; 17.8 to 19.8 percent, 2018; and 18.3 to 20.3 percent in 2017.
“Our unemployment rate was at 5.7 percent in 2017, exceeding the 5.1 to 5.4 percent target. This seems to be due mostly to a reduction in unpaid, underemployed, youth workers in agriculture, who have dropped out of the labor force, likely to go back to school, probably as a result of the CCT [Conditional Cash Transfer],” Pernia said.
In order to address these shortfalls in the government’s targets, Pernia said there is a need to implement 13 policy reforms.
He said there is a need to improve government processes dealing with business; ease restrictions on foreign investments; pursue tax reform toward a simple and equitable tax system; ensure the timely execution of the budget; and seek out new export markets to diversify export destinations.
Pernia added there is a need to lift the quantitative restrictions on rice; diversify high-value crops; invest in disaster resiliency; and ensure the restoration of “normalcy” in affected areas in Mindanao.
Other reforms that need to be implemented include efforts to sustain and enhance programs for vulnerable population; strengthen S&T and Innovation Ecosystem to Face up to Disruptive Technologies; implement a National ID System; and accelerate infrastructure development.
“We remain upbeat regarding our country’s economic performance. Our growth forecasts for 2018 till the end of this Administration’s term in 2022 are guided by the PDP 2017-2022, with which financing and budgeting are aligned. We do hope that our economy’s performance will help ensure that Filipinos will gradually achieve their aspiration of a Matatag, Maginhawa at Panatag na Buhay,” Pernia said.
Image credits: AP/Aaron Favila