Country's output gap tops Asean
DESPITE the projected 6-percent Philippine economic growth this year, the country's gross domestic product will still be 16 percent below the actual output if the Covid-19 pandemic did not happen, the Asian Development Bank (ADB) said in a report.
In its "Southeast Asia Rising from the Pandemic" report released on Wednesday, the ADB said the 16-percent output gap of the Philippines this year is the highest among countries comprising the Association of Southeast Asian Nations.
According to the report, the baseline output without Covid-19 is estimated by applying the average yearly growth from 2009 to 2019 to the pre-pandemic output level.
This was followed by Cambodia (15 percent), Lao People's Democratic Republic (PDR) (14.3 percent), Malaysia (11.8 percent) and Thailand (10.8 percent).
"The Philippines, Cambodia, Malaysia, the Lao PDR and Thailand have the highest output gap relative to their trend output levels," said the ADB.
"For the Philippines and Cambodia, this stems from the relatively strong trend growth in the 10 years to 2019," it added.
According to the report, the Philippines was growing on an average of 6.4 percent in 2009 to 2019.
ADB's report highlighted that the pandemic triggered a massive disruption of the labor market.
"There has been an observed shift from formal or wage and salary employment to informal employment. Young and prime-age workers have been disproportionately affected," ADB said.
To support employment recovery, the ADB said there is a need to implement measures to support workers' labor market transitions and strengthen the resilience of micro, small and medium enterprises.
These measures include supporting training and redeployment, workplace skills development and apprenticeship programs.
The ADB also cited the need to support the digitalization of small and medium enterprises (SMEs).
"Firms have moved operations online and implemented smart working solutions to remain in business during lockdowns and overcome disruptions in supply chains, with online platforms playing an instrumental role in connecting users to new markets, suppliers or resources," said the ADB.