So far in the Philippines, we have not been seeing the depressing rates of joblessness that the United States, a country we had for so long thought to be economically invincible, is currently experiencing.
What seemingly started as a simple mortgage problem in the US, one that worried only the affected banks, is now a major global downturn that has sent consumers tightening their belts, and factories closing shop as demand for products dropped. Indeed, this is a global economic crisis never before seen in our lifetime.
In the US, where this contagious financial crisis kicked off, unemployment in January rose to its highest level in 16 years at 7.6 percent. Since December 2007 when the recession officially started, 3.6 million Americans have already lost jobs.
Weeks ago and in just a single day, a slew of American heavyweight companies, including Caterpillar, Pfizer, Sprint Nextel, Home Depot and General Motors, announced job cuts affecting 45,000 people. Citi alone separately bared it was cutting its workforce by 52,000 or 15 percent of its total manpower number; this is one of the largest layoffs in history.
And Americans are not yet seeing the end of the welfare lines.
Forecasts
Locally, if it’s any consolation, the grimmest news is yet by way of forecasts.
Economic Planning Secretary Ralph Recto said 800,000 Filipinos run the risk of losing their jobs, while Labor’s Marianito Roque said endangered are about 500,000 in various vulnerable industries. A Makati Business Club survey also showed nine of every 10 Philippine companies expect to suffer from the financial crisis and two in every 10 may have to cut their workforce.
Add to these numbers about 900,000 people, ages 15 to 21, who according to Recto should be entering the labor force this year. This is a most desperate sector, barely adults forced by their dire circumstances to seek jobs but will most likely be turned away because there will be no vacancies available.
So far, from Dec. 1 to late January, workers who were retrenched reached a palpable 19,400. According to the labor department, this is an unusual situation, something that needs to be closely monitored, and already a cause for nervousness.
Meanwhile, 34,000 had no choice but to cut work hours, or to take forced leaves and compressed workweeks. They are mostly in electronics, the country’s main export product and an industry that saw overseas orders falling at double-digit rates since middle of 2008 as global demand wanes.
‘Unhappy‘ homecomings
And what about overseas Filipino workers who have been laid off?
Close to 1.4 million Filipinos left for overseas work last year — and obviously we don’t expect them to lose their jobs right away. Officials say the number this year would still be in the million this year despite the crisis. Hopefully, these new hires would help sustain the Philippine economy amid the global financial turmoil.
Last year, nine million expatriates sent home a record P16.4 billion, up 13.7 percent from 2007. However, there are concerns we may soon see this number dropping. The predictions vary from a flat growth to a painful 20 percent decline.
As oil prices fall because of the global economy slowdown, a lot of Middle East companies are reducing their production goals or putting their expansion plans on hold. This means more Filipino expatriates returning and fewer deployments to the Middle East region, where bulk of our OFWs are.
We are seeing a rising number of unhappy homecomings of overseas Filipinos who have lost their jobs in other parts of the world due to the crisis. We’ve seen hundreds of them return from electronics-exporting countries such as Korea and Taiwan.
Returning jobless OFWs wouldn’t only boost the country’s unemployment rate, but would drag economic growth or even push the country into a recession. Remittances, after all, account for about a tenth of gross domestic product and are a major driver of domestic consumption.
Game plan
The next question often asked in this dire situation: what is the government’s game plan? One answer: Training, livelihood assistance, loans. Frankly, very few can relate to this state remedy that is intended to help those displaced by the crisis.
If, during the days before the recession, entrepreneurship was a concept that many found difficult to embrace, what more these days when consumers are not buying and so many more established businesses are reeling from the crisis.
No wonder that local workers as well as OFWs who lost their jobs are not ecstatic about the prospect of sitting through skills training courses. How can they concentrate on their training while their families are going hungry?
No blanket panacea
There really is no blanket approach on the unemployment problem. The government must look at crucial sectors one by one, and lay out a specific plan on how its much-touted fiscal stimulus plan would help create jobs.
In the area of agriculture and forestry for instance, we’ve heard about the government’s plan to employ 180,000 workers to plant trees across the archipelago to generate employment in the midst of the global fallout.
A budget of P7 billion has been allotted for the program which will be in place in six months. Also part of the so-called “green-collar” category are the cleaning up of coastal areas, retrofitting of oil-burning bus so they can run on LPG as well as installation of solar panels and generating power from rivers.
Now more than ever, the government should invest in revitalizing our agriculture sector. Agribusinesses in Mindanao have the potential of tripling the number of workers they employ if they are able to improve their production methods.
Let’s just hope that all these pump-priming programs won’t be putting to waste taxpayers’ hard-earned money due to inefficient implementation or thru corruption.
Asia Warranty Services expands consumer protection
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