Unemployment jump to show lockdown toll on Philippines: economist

ABS-CBN News

Posted at Jun 04 2020 09:51 AM | Updated as of Jun 04 2020 10:24 AM

Commuters wait for a ride along Commonwealth Ave in Quezon City on June 2, 2020, the second day of general community quarantine in Metro Manila. Mark Demayo, ABS-CBN News

MANILA -- Unemployment likely soared during the virus lockdown, an economist said Thursday on the eve of the official data release, as the Philippines started easing restrictions.

The jobless rate could hit 9 to 10 percent in the 3 months ended April, University of Asia and the Pacific economics professor Victor Abola said. Unemployment was at 5.3 percent in January.

"It's gonna be quite a big jump. It could be quite big," Abola told ANC's Market Edge. "We haven't had anything like that."

Inflation data for May is also due out Friday. The Bangko Sentral's think tank gave a 1.9 percent to 2.7 percent forecast range, compared to 2.2 percent in April.

Abola said inflation was unlikely to slow further as food and fuel prices spiked in May.

In crafting stimulus measures, President Rodrigo Duterte's economic managers appear to be careful not to take on too much debt to maintain the Philippines' credit ratings, Abola said.

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Metro Manila shifted to a general community quarantine last Monday with fewer restrictions as the Philippines attempted to resuscitate its economy from one of the world's longest coronavirus lockdowns.

The nearly 80-day quarantine shut the capital region that is home to a tenth of the country's 100 million people and accounts for a third of gross domestic product. The economy shrank in the first quarter, the first in 22 years and some 2.6 million jobs were temporarily or permanently lost, officials said.

Casino resort operator Okada Manila said it would cut 1,000 jobs while motel chain Victoria Court said it would shut some branches.

Abola said the central bank could cut the overnight borrowing rate by another 25 basis points in July after a pause during the June meeting.

During the lockdown, the Bangko Sentral slashed 100 basis points off the benchmark interest rate, cut 200 basis points from the reserve ration requirement or RRR for banks, and authorized the purchase of P300 billion in government securities.