By DAWN CECILIA PEÑA
MANILA – Independent think tank Ibon Foundation said that the 11.8 percent second-quarter growth in the gross domestic product (GDP) is not a sign of recovery gaining traction.
“[It] is only a rebound from the record economic collapse in the same period last year,” the research group explained.
“That growth will fall in the rest of 2021 as the effects of economic scarring, continued lockdowns, and misguided fiscal conservatism are felt,” it continued.
The relatively high growth rate was seen because it is the first to be measured against the low base of when the lockdowns were at their worst last year, including a 17 percent contraction in the second quarter of 2020.
The group further noted that the economy is virtually stagnant, as it said that “seasonally-adjusted quarter-on-quarter growth is a clearer indicator of momentum.”
Data from the Philippine Statistics Authority revealed that the “GDP posted a quarter-on-quarter decline of -1.3 percent in the second quarter of 2021.”
Gov’t spending for economic push
The group explained that a number of basic issues need to be resolved for sustained high growth and to recover rapidly, considering that the economy was slowing even before the pandemic.
“Restrictive community quarantines are likely to continue in the absence of serious efforts to expand testing, contract tracing, and targeted isolations,” they added.
The government has also been spending less to increase its creditworthiness whenever it needs to apply for a loan. Excluding interest payments, the government spent P2 trillion ($39.6 billion) in the first six months of 2021, 9.4 percent more than the P1.8 trillion ($35.6 billion) spent in the same period last year.
“This is no stimulus to the economy. This is even less than the average annual growth in government spending since the start of the Duterte administration,” Ibon said.
“Moreover, the government is not spending enough on containing the virus through free mass testing, expansive contact tracing, and making targeted self-quarantines and isolation more convenient for the people,” it added.
Fine print contradicts growth
A study earlier conducted by the United Nations in the Philippines and the International Labor Organization also revealed that efforts to create jobs in the Philippines are a matter of urgency as millions of Filipino workers are unemployed.
Despite the turn to positive growth, the number of unemployed Filipinos is still higher than the first quarter average from January to March. If computed with the national level estimates of the preliminary labor force survey results, government data revealed that there are 3.9 million unemployed in the second quarter of 2021.
“The 1.1 million increase in employment to 44.4 million in the second quarter cannot be taken at face value as jobs have shifted away from regular full-time work to informal pseudo-work,” said Ibon.
By hours worked, part-time workers increased to 17.2 million and those with a job but not at work to 733,000. In contrast, the number of full time workers fell to 26.4 million.
Moreover, based on IBON computations on Bangko Sentral ng Pilipinas data on households with savings, over seven in ten households are without savings – equivalent to 17.8 million. While data from the trade department showed that 99,575 micro, small, and medium enterprises closed while 458,043 are partially operating as of June 2021.
IBON said the P420 billion ($8 billion) Bayanihan 3 proposal should be prioritized and even expanded to become even more effective, “it is an important measure especially after 17 months of stingy COVID-19 response.” (JJE, RTS)