From Inquirer.net: Experts warn of more layoffs in RP
By Kristine L. Alave
Philippine Daily Inquirer
First Posted 18:52:00 01/23/2009
MANILA, Philippines-The closure of chip manufacturer Intel Corp.’s plant in the Philippines was just the “tip of the iceberg” and the Arroyo government should brace itself for more layoffs, plant shutdowns, and dire economic indicators that will continue beyond 2010, economic and labor experts said Friday.
Former Budget Secretary Benjamin Diokno, in a labor forum sponsored by the Blas F. Ople Policy Center at the Asian Institute of Management, said the Philippines will continue to suffer the effects of the worldwide recession that started in the United States even after the US recovers.
“The most optimistic forecast is that the US economy will recover in 2010. The Philippines' recovery will come after that. The Philippines' recovery cannot precede that,” Diokno said. He noted that the US remains the biggest market for Philippine exports, which were badly hit by the recession.
Even if the US and other major economies recover next year, their revival “will not be a strong one,” he said.
Diokno said Intel, which will shed 1,800 jobs when it closes its General Trias, Cavite chip manufacturing plant later this year, was just the beginning. Since last year, major export firms like watchmaker Timex Corp. in Cebu province have been scaling down their local operations and laying off employees due to the financial crisis.
“It's just the tip of the iceberg. If two major exporters are in trouble, what more the smaller ones?” Diokno noted.
“The economies of the top 10 export destinations of Philippine exports are expected to get worse in 2009 and a weak recovery is projected in 2010.... Weaker economies mean lower demand for Philippine products. Weaker export demand means more layoffs,” he said.
Diokno, who now teaches at the University of the Philippines' School of Economics, estimated that 500,000 Filipinos here and abroad will lose their jobs as the global recession deepens.
So far, the Labor department said it expects 60,000 workers in the electronics and information technology sector to lose their jobs because of the recession. Since late last year, Labor Secretary Marianito Roque said 15,000 Filipinos, mostly in export zones, have been laid off, while 19,000 others faced reduced working hours.
The Philippine Overseas Employment Administration said over 3,000 Filipinos working in Taiwanese factories were laid off and sent home during the whole month of December. Labor officials in Taiwan said the number could rise up to 6,000 by June.
Both Diokno and labor expert, Professor Rene Ofreneo of the UP School of Labor and Industrial Relations, predicted that underemployment will grow in the coming years as more and more Filipinos take on jobs they have previously turned down just to survive in these hard times.
Citing labor figures during the first half of the 1980s, when the Philippine economy under strongman Ferdinand Marcos went into recession and depression, Ofreneo said employment figures usually grow during recessions.
“During the recession in the 1980s, employment grew. That's because people take on whatever job is offered to them to cope with life. The underemployment will rise and so is the informal sector,” he told the Philippine Daily Inquirer in an interview.
Diokno said the number of Filipinos taking on jobs that they do not like has been increasing. “The number of underemployed increased by 248,000 from 6,376,000 in April 2007 to 6,626,000 in April 2008,” he said.
“Labor participation rate has gone down: from 64.5% in April 2007 to 63.2% in April 2008. An increasing number of workers have given up -- discouraged by failure to find a job under the current weak economic regime,” he added.
Both Ofreneo and Diokno were pessimistic about the government's announcement that it could create jobs for displaced Filipinos. Ofreneo said the government cannot just retrain overseas Filipino workers for new types of work, saying they tend to be more negative in their outlook because of being laid off from abroad.
“The worst people to train are those in crisis. Those who should be retrained are people who still have jobs and are looking for better work,” he said.
Diokno said the government's track record in job creation in the past year was poor. If not for the informal sector, which absorbed thousands of displaced workers, the number of jobless workers would be higher than what is on record, he said.
“In January 2008, only 150,000 jobs were created. But even this aggregate number understates the severity of the unemployment problem. During the same period, 488,000 wage-and-salary jobs disappeared. The job loss was offset by the creation of relatively less desirable own-account jobs (397,000) and unpaid family workers,” the economist said.
Diokno said the government was not doing enough to help the workers. Even though the Philippines has been grappling with the effects of recession overseas since last year, the Arroyo administration has yet to draft a clear roadmap to save the economy and the jobs, he said.
“Our leaders appear to be complacent. Our national leaders are not giving the economic storm the full attention that it deserves,” he said.
He noted that the government has not provided specifics on how the P300 billion stimulus package would be spent.
“There is a lack of a clear, doable, and financially sustainable economic recovery program to address the current misery of most Filipinos and to prepare Filipino businesses and workers to compete better under a new economic order when the world economy recovers,” he said.