MANILA - The Asian Development Bank said Thursday the jobless rate in the Philippines will peak in June but employment will bounce back early next year as the economy slowly recovers from the lockdowns imposed to curb the spread of COVID-19.
The Philippines’ unemployment rate jumped to a record 17.7 percent in April at the height of the coronavirus lockdowns.
Kelly Bird, Philippine country director at ADB, said the unemployment rate could hit 22 percent by June, but “by early next year, it should fall below 10 percent and continue to decline with economic growth."
"If we do expect the 6.5 percent growth next year and then continue, we would expect most of the recovery to occur by 2022," Bird said.
Earlier, London-based Capital Economics said extending the General Community Quarantine in Metro Manila and other economically important but high-risk areas may worsen economic contraction to 8 percent this year.
This is larger than the 2 percent to 3.4 percent contraction forecast by economic managers back in May.
The Philippines already suffered a 0.2 percent contraction in the first quarter of 2020.
The economic team led by the Finance Department has been pushing for a continued reopening of the economy, even as daily cases of COVID-19 have been reaching around 2,000 in recent days.
Bird meanwhile said other countries are also reimposing harsher quarantine measures as the number of cases of the deadly disease rise again.
"Of course they will delay and slow the recovery in the short term. But we also know, that even those countries that didn't lock down and had a much softer approach, the economic costs are not a lot different," he explained.
Bird said this is because the virus is affecting consumer confidence and investor confidence globally.
ADB is set to lend out an average of $3 billion to the Philippines from 2020 to 2022, to help in its rebuilding and recovery efforts.
This is more than three times the multilateral lender's average loan program with its host country which was at $800 million from 2011 to 2017.
For 2020, it's lending out up to $4.2 billion to the Philippines, which is a new record high from last year's $2.5 billion.