World Bank sees 3 million more Filipinos unemployed, poor this year | Inquirer Business

World Bank sees 3 million more Filipinos unemployed, poor this year

By: - Reporter / @bendeveraINQ
/ 05:00 AM October 03, 2020

As many as 3 million more Filipinos will either be jobless or fall into poverty this year due to the health and economic crises caused by the COVID-19 pandemic, according to the World Bank.

In a recent report, “Economic Impact of COVID-19: Implications for Health Financing in Asia and Pacific,” the bank said the Philippines would need an additional $70 million (over P3.3 billion) in social health insurance subsidies to cover newly unemployed and impoverished Filipinos.

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The September report said “unemployment in the Philippines is expected to rise to 6.2 percent in 2020, up from 5.1 percent in 2019: implying an additional 1 million projected to be unemployed.”

At the height of the longest and most stringent COVID-19 lockdown in the region, the country’s unemployment rate climbed to a record 17.7 percent in April, equivalent to 7.3 million jobless Filipinos, according to the government.

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With 75 percent of the economy paralyzed from mid-March to May, gross domestic product (GDP) fell by 16.5 percent year-on-year in the second quarter, plunging the Philippines into recession.

Worst decline in 35 years

As the quarantine restrictions were gradually lifted, the unemployment rate eased to 10 percent in July, equivalent to 4.6 million jobless Filipinos.

The World Bank previously projected the Philippine economy to contract by 6.9 percent in 2020—poised to be its worst decline in 35 years.

This GDP drop is expected to push an additional 2 million Filipinos below the poverty threshold, the World Bank said.

Based on its poverty threshold for lower middle-income countries of $3.2 per day per capita in 2011 purchasing power parity, the bank projects the country’s poverty rate to rise to 22.4 percent in 2020 from 20.5 percent last year, “despite the government’s efforts to mitigate the negative effects of the pandemic on poor and vulnerable households.”

As the economy recovers over the next two years, the poverty rate will gradually decline to 21.4 percent next year and to 20.4 percent in 2022, very close to what it was in 2019, World Bank estimates showed.

Below gov’t target

The World Bank projected GDP growth of 5.3 percent in 2021 and 5.6 percent in 2022—both below the government’s target range of 6.5- to 7.5-percent yearly expansion in the next two years.

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The Philippine government’s official poverty rate was a low of 16.7 percent in 2018.

The World Bank said the Philippines should increase financial support, especially on health expenses, for the bigger number of jobless and poor Filipinos.

“Given current coverage and contribution rates, this could potentially imply additional outlays of … $70 million in the Philippines to manage the loss in contributions and potential increase in the need to provide subsidized coverage within [its social health insurance] scheme,” the World Bank said, citing the sum of lost contribution payments from unemployment as well as additional contributions that the government must shoulder for the poor.

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