MARCH 9, 2021



We started 2020 with very good prospects. The country was likely to become an upper middle-income country two years ahead of our 2022 target.

However, around this time last year, the number of COVID-19 cases started to rapidly increase. To save lives and protect communities from the virus, we imposed the enhanced community quarantine that shut down 75 percent of the economy. At the same time, we boosted our health care capacity to keep infections at bay. Fortunately, at no time was our health system in peril of being overwhelmed.

This came at a huge cost to the economy and the people. Even as we gradually reopened the economy in the second semester of 2020, the full year gross domestic product (GDP) contracted by 9.5 percent, the worst performance in more than seven decades. Millions of jobs were lost and, as a result, millions experienced hunger.

Labor force survey results

As we further reopen the economy, we continue to see signs of recovery. The results of the January labor force survey (LFS) are promising as it tells us that we are on track to getting back most of the jobs we have lost due to COVID-19 and the quarantines.

While the unemployment rate remains unchanged at 8.7 percent, more opportunities from the easing of restrictions meant that more people are rejoining the labor force. Between October 2020 and January 2021, some 1.4 million jobs were restored as the labor force participation rate, or the proportion of the working age population that is either working or actively looking for work, increased from 58.7 percent to 60.5 percent over that three-month period.

The biggest improvement is seen in the National Capital Region, where some 269,000 jobs were restored. As the economy was further reopened, the unemployment rate decreased from 12.4 percent in October 2020 to 8.8 percent in January 2021. Likewise, the underemployment rate dropped from 11.1 percent to 8.2 percent in the same period.

Outside of NCR, unemployment increased from 8.2 percent in October 2020 to 8.7 percent in January 2021. The underemployment rate also increased from 14.9 percent to 17.1 percent in the same period. These can be attributed to i) the loss of jobs and reduction in income from weather disturbances and flooding, ii) outbreak of the African Swine Fever that badly affected livestock production, and iii) continued mobility restrictions that affected travel and domestic tourism especially around the holiday season when people in the provinces typically have additional income opportunities.

While the data show that across sectors, we are gradually getting back the jobs we lost due to the pandemic, the smaller progress in the past quarter suggests that we still need to address the remaining restrictions before the economy can get closer to normal.

This can be done through the i) the gradual and safe relaxation of community quarantine and only using localized quarantine when needed, ii) the expansion of the age group allowed to go out, subject to health safeguards, to increase consumer demand, and iii) the further opening of public transportation, including supporting active transport, such as more protected bicycle lanes. All these will provide Filipinos with more job opportunities, as well as safer and more convenient options to go to work.

A three-pronged economic recovery strategy

To accelerate economic growth and job creation this year, a three-pronged strategy is needed: First, safely reopening our economy, while strictly adhering to health standards. Second, fully implementing the recovery package, especially those whose budgets have already been allocated but not yet fully spent. And third, ensuring timely implementation of the vaccine program to cover the entire adult population.

On the first strategy, the gradual reopening of the economy requires a more careful and calibrated approach, given the risks from the new COVID-19 variants. A more targeted approach is also needed.

On the one hand, we will need to be more vigilant in high-risk areas by strictly enforcing the health standards and using localized quarantines. This way, we can reduce virus spread without affecting the healthy majority who are in need of jobs to address their hunger and other health concerns.

On the other hand, in low-risk areas, we can gradually start allowing expanded capacities in businesses, transport, and other sectors, as well as safely widening the age group allowed to go out.

As we roll out the vaccine, we also need to resume the pilot testing of face-to-face classes in the lowest-risk areas. Prolonging home-based learning will have permanent scarring effects on many students and thus lower their future productivity and earning potential. The gradual return to school can also help their mental, social and emotional well-being. This will also give many parents the opportunity to return to work full-time and contribute to the economic recovery.

On the second strategy, the full and fast implementation of the recovery package would underpin economic growth this year and onwards. The higher stimulus through the Bayanihan II, the 2020 budget extension, the 2021 budget, as well as the swift enactment or implementation of key legislations are all crucial. These reforms include the Financial Institutions Strategic Transfer (FIST) Act, the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act, and the Government Financial Institutions Unified Initiative to Distressed Enterprises for Economic Recovery (GUIDE) Act.

We need to ensure that programs already budgeted for under Bayanihan II and under the 2020 and 2021 budgets are implemented quickly. Our recovery and long-term development prospects also hinge on accelerating the infrastructure program, which has the highest multiplier effect on jobs and on the economy.

On the third strategy, while the road ahead remains challenging, we are starting to see the light at the end of the tunnel with the COVID-19 vaccination program in progress. On March 1, 2021, we started inoculating our medical front liners. This is a leap forward for our healthcare system and the entire country. The added confidence it provides will boost our recovery further.

We continue to receive more doses to keep the vaccination program going for the high-risk populations. We aim to provide vaccines to at least 70 million Filipinos this year, or 100 percent of the entire adult population. Rolling out these lifesaving doses will allow us to safely open the economy more and restore jobs and incomes to make our fight against hunger more sustainable.

Apart from these strategies, we call on everyone—from individuals to businesses —to strictly implement and comply with the minimum health standards: Wear masks, keep your distance, wash your hands, stay home when with symptoms. Be very responsible also when at home, as many cases now spread among household members. Our health and safety rest largely in our own hands.


The government is committed to delivering evidence-based, prudent, and timely policies as well as adaptive programs to help restore income opportunities and jobs.

We assure the Filipino people that we will turn this crisis into an opportunity to regain our pre-pandemic growth momentum for a strong and sustainable recovery, collectively build a better normal, and foster a more inclusive society for many years ahead.