Jobless rate seen staying elevated in 2023, budget papers show

The country’s jobless rate is seen staying above prepandemic levels and could even go higher next year amid expectations that consumer prices will stay elevated for some time.

Documents on the proposed P5.268-trillion 2023 national budget released on Monday showed the unemployment rate projected to inch up to 5.7-6.8 percent next year from 5.1-6.5 percent this year.

The Inquirer sought comment from National Economic and Development Authority (Neda) officials, including Socioeconomic Planning Secretary Arsenio Balisacan, but they were unable to provide an explanation as of press time.

Budget documents showed the jobless rate would ease to 5-5.3 percent in 2024 before rising again to 5.5-5.8 percent in 2025.

During the first half of 2022, the average unemployment rate of 6 percent, equivalent to about 2.9 million Filipinos, improved from the 10.4 percent (4.5 million unemployed) in 2020 at the height of the most stringent COVID-19 lockdowns, which shed millions of jobs and shuttered thousands of businesses, as well as the 7.8 percent (3.7 million jobless) a year ago amid the prolonged pandemic.

However, the Philippines had yet to revert to the average of 5.1-percent jobless rate in 2019, pre-pandemic, equivalent to 2.3 million Filipinos without work.

The Marcos administration aims to reduce the unemployment rate to 4-5 percent by 2028 by increasing the share of salaried employees in private establishments to 53-55 percent of total from 48 percent last year.

Projections for next year’s budget showed that headline inflation would likely remain elevated next year, ranging at 2.5-4.5 percent, above the annual 2-4 percent target range of manageable price hikes conducive to economic growth.

For this year, President Marcos’ economic team expects the year-on-year rate of increase in prices of basic commodities overshooting the target band to 4.5-5.5 percent.

The government nonetheless projected economic growth next year at a faster pace of 6.5-8 percent than this year’s 6.5-7.5 percent goal. INQ