The first quarter 2021 economic performance is the clearest proof that government hype of employment surpassing pre-pandemic levels are hollow, said research group IBON. The quality of work is deteriorating – with more informal and part-time work – and the number of unemployed higher compared to a year ago. But real recovery is attainable if the Duterte administration decides to implement effective and meaningful health and economic measures, IBON said.

Major sectors have continued to contract year-on-year: agriculture (-1.2% growth), construction (-24.2%), and wholesale and retail trade (-3.9%). IBON noted however that these are the sectors with the three biggest employment increases between January 2020 and March 2021: 1.5 million additional employed in agriculture (16% increase to 11.1 million), 941,000 additional employed in construction (24% increase to 4.9 million); and 1.7 million additional employed in wholesale and retail trade (20% increase to 10.3 million).

The contractions in these sectors despite huge increases in employment imply paltry earnings, depressed household incomes, and correspondingly depressed aggregate demand, the group said.

The country’s jobs crisis is also reflected in household final consumption expenditure (HFCE) which, again despite hyped employment gains, registered -4.8% growth, said IBON. HFCE historically accounts for some three-fourths of GDP by expenditure.

The four straight quarters of negative growth in HFCE because of collapsed family incomes will be a drag on the economy as a whole, said the group. Moreover, this implies that household consumption, which may not have been high to begin with, is even lower with a corresponding marked decline in household welfare.

IBON also noted that after a year of the Duterte administration’s poor response, the economy is still down to where it was four years ago. Real gross domestic product (GDP) per capita (Php38,765) and real HFCE per capita (Php28,802), measured at 2018 constant prices, are as low as they were in the first quarter of 2017.

The group also noted that of the ASEAN country-members with available figures, the Philippines so far had the worst GDP growth (-4.2%) and unemployment rate (8.7%) in the first quarter of 2021. Vietnam (4.5%) and Singapore (0.2%) registered positive growth, while Indonesia (-0.7%) and Malaysia (-0.5%) had much smaller growth contractions. Vietnam (2.4%), Singapore (2.6%) and Malaysia (4.8%) also had much lower unemployment rates.

IBON said that the economic managers are being dissembling by claiming that the economy is improving. Tens of millions of Filipinos have been in distress for over a year now and their difficulties demand immediate intervention. The government has the fiscal resources for this and can even raise more if it chose to, the group added.

However, the government is not prioritizing the health and welfare of the people. It is, for instance, unconscionable that infrastructure projects, debt service, and corporate tax cuts are paid for by neglecting ayuda which causes hunger and poverty for tens of millions of Filipinos, said IBON.

The so-called recovery package proposed by the economic managers is grossly insufficient and only affirms that the Duterte government refuses to spend what is needed to cope with the pandemic and the economic collapse that the lockdowns have caused, said the group.

The economic problems and distress to Filipinos will only worsen in the years to come if the government does not take on substantial health and economic interventions towards real recovery, IBON stressed.