MANILA – The National Economic and Development Authority (NEDA) is keeping its growth target of 6.5 percent to 7.5 percent this year but sees the economy maintaining such growth next year taking into account the short and medium-term impacts of the coronavirus disease 2019 (Covid-19) pandemic.
Next year’s gross domestic product (GDP) target set under the updated Philippine Development Plan (PDP) is lower than the 8 to 10-percent growth forecast announced by the Development Budget Coordination Committee (DBCC) last year.
In a virtual press briefing on the release of the updated PDP 2017-2022, NEDA Undersecretary Rosemarie Edillon said economic managers are optimistic about exceeding next year’s growth target under the updated plan.
“We think that we can actually surpass that target. We have come up with this target early on as we were updating the PDP. But given recent developments, we at the DBCC, we are setting for ourselves a higher target and we think… we can grow much faster than the original PDP,” she said.
Under the updated PDP, the NEDA also kept the 7 to 9-percent target for the unemployment rate for this and next year, while revised its poverty incidence target to 15.5 percent to 17.5 percent from the original 13 to 15 percent.
“Unemployment rate we know that there has been a sustained improvement from 2017 to 2019 but then again due to the pandemic, there was an increase in the unemployment rate. Furthermore, while we expect the gradual recovery beginning late 2020 and then in 2021, we also are cognizant that there will be a substantial increase in the labor force in 2022 as the first batch of the K-12 graduates will be graduating from College and are expected to join the labor force,” Edillon said.
Socioeconomic Planning Secretary Karl Kendrick Chua said the huge additional supply of workers next year explains why the unemployment would “temporarily” be higher.
“(This is) not only due to the effects of the pandemic which we expect to improve by that time but also due to the additional temporary increase in the labor force. But after that year, we will see the economy adjusting,” he said.
Edillon said about 2.4 million to 2.8 million jobs are expected to be created this year, and then between 1 million to 1.2 million jobs in 2022.
“We are already thinking of having more of these retraining and retooling programs and even more scholarships in order to increase the employability of graduates and even the labor force,” she added.
Meanwhile, the NEDA likewise maintained the 2 to 4-percent target for inflation for 2021 and 2022.
The country’s inflation rate averaged 2.6 percent in 2020. (PNA)
