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PH’s economic recovery is progressing despite challenges: Diokno

The Philippine economy is still recovering, but Governor Benjamin Diokno of the Bangko Sentral ng Pilipinas (BSP) stated Tuesday that the improvement in the jobless rate makes growth prospects optimistic.

Diokno said in a Viber message to journalists that the July 2021 Labor Force Survey results show signs of economic recovery, with the unemployment rate falling to its lowest level since the pandemic, though challenges remain, as evidenced by the decline in labor force participation and rise in underemployment rates.

“The Philippines’ medium- and long-term growth prospects remain promising,” he added, citing the government’s expedited vaccine deployment, aggressive infrastructure development, and ongoing drive for critical economic reforms.

The Philippine Statistics Authority (PSA) announced on September 7, 2021, that the jobless rate fell to 6.9% in July from 7.7% the previous month.

However, the labor force participation rate fell to 59.8% in July from 65 percent in June, resulting in a 3.4 million net job loss from June to July, which was attributed to worries about the coronavirus illness in 2019. (Covid-19).

The underemployment rate also increased to 20.9 percent in July, up from 14.2 percent the previous month, owing to a rise in underemployment rates outside the National Capital Region (NCR).

Short-term obstacles to the recovery process, according to Diokno, include a decrease in labor force participation and an increase in underemployment.

He said the central bank has taken steps to help the economy recover from the pandemic’s effects, including a 200-basis-point reduction in the BSP’s key policy rates to a record low of 2% for the overnight reverse repurchase (RRP) facility rate and a 200-basis-point reduction in the banks’ reserve requirement ratio (RRR).

According to Diokno, the BSP has injected approximately PHP2.2 trillion into the banking system thus far.

“The BSP will continue to assist the economy for as long as it is needed,” he added, “until we see signs of a strong and durable economic recovery, as reflected in part in the employment situation.”

“We are dedicated to helping the Philippines develop on its fledgling economic recovery, toward a healthier post-Covid-19 economy,” Diokno said.

He went on to say, “This is consistent with the BSP’s fundamental goal of preserving price stability favorable to balanced and sustained economic development and employment.”

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