Neda: Gov’t stimulus to help ease recession, create jobs

The government’s “fiscally responsible” stimulus packages to address the health and socioeconomic crises inflicted by the COVID-19 pandemic will narrow economic contraction this year and create thousands of jobs, according to the country’s chief economist.

Acting Socioeconomic Planning Secretary Karl Kendrick Chua told the Senate finance committee on Thursday that preliminary estimates on the impact of the Bayanihan to Heal as One Law (Bayanihan 1) and the pending Bayanihan to Recover as One bill (Bayanihan 2), awaiting President Duterte’s signature, showed these would boost gross domestic product (GDP) by 2.4 percentage points and generate 470,000 jobs.

Chua, who heads the state planning agency National Economic and Development Authority (Neda), later explained to the Inquirer that without the Bayanihan 1 and 2 packages, “the GDP contraction can be worse” in 2020.The economic team had projected GDP to shrink by 4.5-6.6 percent this year following an economic recession in the first half when output fell by an average of 9 percent.

Chua told senators that Neda projections showed the poverty rate would be between 15.5 percent and 17.5 percent next year, or “slightly worse or slightly better” than the 16.7 percent recorded in 2018, depending on how soon the outbreak could be contained and its negative effect on livelihoods addressed.

Chua said urban poverty could worsen temporarily as the number of COVID-19 cases remained high in cities, entailing stricter lockdowns.

On the other hand, COVID-19 would have lesser impact on the livelihoods of those in rural areas given the fewer infections there, Chua added.

The Neda chief also said the unemployment rate this year could rise to 11-13 percent before easing to 6-8 percent by next year, amid easing COVID-19 quarantine restrictions.