Layoffs last option for businesses

MANILA, Philippines - Retrenchment is the last option for businesses during these times of crisis. Instead, businessmen are asking the government to reduce taxes, the Management Association of the Philippines (MAP) said yesterday.

Preliminary results of a survey conducted by MAP among its more than 800 members showed that retrenchment is the last thing that the companies would do in order to reduce their operations expenses.

Elizabeth H. Lee, MAP Trade, Industry and ICT Committee chairman said that only two percent of the respondents said they will lay off workers to reduce their operations expenses. Likewise, five percent said they will bring their business elsewhere through offshoring.

“Retrenchment is the last resort. Businessmen realize that it does not do business any good if the unemployment rate goes up,” Lee said.

Lee admitted that there has been lay offs in the past given the slowdown in consumer demand worldwide. In spite of this, she said she remains optimistic. “Maybe the lay-offs are over.”

At the same time, many businessmen maintained that electricity costs in the country is high and must be reduced but the number one item that should go down is taxes.

Early this year, the government has already cut corporate taxes by five percent.

MAP Trade, Industry and ICT committee vice chairman Isagani P. Ferrer said that their group will try to engage the government and will present their cause.

“If we cut the tax then we widen the tax base thereby increasing tax revenues,” Ferrer noted. However, he conceded that this may not be the time to cut taxes given the cut implemented this year.

For his part, committee governor in charge Mark Watkinson said that improvements in the fiscal system may not be confined to tax reduction.

Watkinson said that the government is implementing many schemes that would encourage investors like giving tax incentives to new and existing investors. He said that it is possible that not all businessmen are aware of the tax perks being given by the government to encourage capital infusion.

The initial result of the survey further showed that the top three cost saving measures of firms are imrpoving productivity with the help of automation and ICT with 61 percent, business process re-engineering such as redesigning organizational processes with 33 percent and outsourcing or out-tasking with 21 percent.