Employment seen to boost PH growth

by Anna Leah E. Gonzales

FIRST Metro Investment Corp. (FMIC) and University of Asia and the Pacific (UA&P) said the robust economic recovery will likely continue in the second quarter of the year.

The Philippine economy returned to pre-pandemic level in the first quarter of the year, growing by 8.3 percent from a -3.8 percent in the same period last year.

According to FMIC and UA&P, the huge gains in employment will help boost growth.

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“With the record number of employed persons [at 46.5 million] as well as the labor force participation rate [65.4 percent], leading to unemployment rate of 5.8 percent, the lowest in the post-pandemic period, the positive impact will likely carry on until Q2 (second quarter),” FMIC and UA&P said.

FMIC and UA&P also noted that the Philippines will be able to withstand the headwinds with the help of Marcos’ Cabinet members.

“The robustness in the economic recovery, founded heavily on employment gains, should spill over into Q2. And while a tighter fiscal space and inflation pose serious headwinds in H2, an economic team of high-quality technocrats in the new president’s Cabinet can handle the emerging scenario,” FMIC and UA&P said.

The report noted that the industry sector with expected gains from mining, manufacturing and construction will lead growth in the second half of the year.

FMIC and UA&P, however, said rising inflation, which is expected to settle at above 5 percent for the rest of the year, continues to be the main headwind for the economy.

“The [Russia-Ukraine] war remains unpredictable, but the second-round effects of unusually elevated crude oil prices have affected other commodities. With higher inflation comes higher interest rates which impinges on spending by consumers and borrowing by firms,” they said.