Job losses and job cuts in Philippines

The Philippine unemployment rate jumped to 7.7% this January, up from 6.8% in October. That's substantial. More than 40,000 people lost their jobs at the start of the year, mainly from the manufacturing sector.

Government's official line is---job mismatch.

Government is blaming the education sector for not producing enough graduates to fill in current manpower or pooling requirements of companies. So, government has now found a very convenient excuse to put or redirect the blame for its inability to create a nice job environment.

Blame it to the schools. And, in all honesty, government might be right.

Majority of courses being offered right now are in the health sector. Thousands apply to become nurses or medical therapists instead of practical skills courses. For example, many companies need plummers, miners and welders. There's a scarcity of these people because everyone's either jumping to the mariner's job or trying to become nurses.

Yet, government must at least admit one thing---our economic performance is turning dismal. Our business environment is losing its bullishness. Many foreign companies are thinking twice of investing here due to bureaucratic red tape and graft and corruption. Imagine, you're a foreign investor and one Cabinet secretary approaches you and tells you straight in your face that you can't do business here without giving him 2 million pesos?! Philippine star Jarius Bondoc just wrote about it a few days ago.

11 million Pinoys to lose their jobs in 1st Quarter 2009

Estimates made by the Ibon Foundation show that eleven million Filipino workers will probably lose their jobs this year. Add this to the 10.7million Filipinos walking like ghosts and have lost their shirts last year. That's a whooping 23 million jobless Pinoys needing government assistance.

Labor groups are now worried that this figure might probably increase due to reports that export companies are closing shop one after the other. Some banks have also reported quarter losses. Manufacturing firms, particularly garments factories have cut down on production. Many service establishments have also intimated a desire to temporarily decrease the number of their workers due to the tremendous financial stresses they are experiencing.

Question---is the economy able and strong enough to absorb this? A higher unemployment rate will simply decrease the attraction of the Philippines as an investment site since it shows how weak economic performance is. Likewise, how will these multitudes survive the onslaught of a full global recession? Singapore, for example, has already entered the worst recession in decades and they are really clueless as to how to support their citizens. Japan, China and Korea are now on the verge of economic collapse and are expected to declare recessions.

Question number 2---how strong or weak is the economy? Latest figures from the National Economic Development Authority (NEDA) shows that first quarter economic figures in 2009 could reach a negative or at best, one percent growth. So, contrary to government pronouncements, the Philippine economy is actually in worse shape. Arroyo has been bragging that we can survive this global recession but in truth, and in fact, we are now losing the game and at an early stage at that!

A stimulus package is being prepared but many sectors worry that this plan is just a pre-election budget meant to buttress local government and grassroots support for the administration bet come 2010. The economy really needs a stimulus plan. But the problem right now is even this stimulus plan is being politicized by the very same people we repose trust on and we elected as our government administrators.

These political maneuverings in the midst of a devastating economic crisis could really create a solid groundswell of dissent that could explode before the faces of Mrs. Arroyo and her gang of thieves this year.

Remember September 21

Two days from now, we'll commemorate the imposition of dictatorial rule. The once strongman Ferdinand Marcos, one of the most intelligent yet the second most despised Philippine leader (based on recent survey, its Gloria who tops the list of the most despised), declared martial rule and from that year on, 1972, he ruled the country with an iron-fist. He was only deposed 14 years after with a mammoth rally in that fabled avenue, now known as Epifanio delos Santos (EDSA) avenue.

Now, talks are rife that Gloria is poised to declare martial rule herself, just to prolong her regime beyond 2010. Malacanang is tight-lipped on its incidious plan, even denied the allegations made by its former defense secretary. Former secretary Avelino Cruz said the People should be vigilant against attempts at imposing a de-facto martial rule, saying that Gloria has the "tendency" to go that route. 

However, New Philippine Revolution thinks otherwise. The palace is really not hot on the idea, since this will further erode public trust and could even lead to a massive destabilization. Cruz is right--Gloria has ruled this country for so long, more than enough to effect damage to government institutions. It does'nt take an intensification of the Mindanao conflict to actually justify an emergency rule. Since 2004, the country has been under tremendous seige from big-time operators, unscrupulous government officials and profiteers. Government has been doing a balancing act eversince and it has done a very good job, to the detriment of the People.

What we need is an emergency plan to insulate the country against global financial attacks, in the light of the US sub-prime crisis. The next few months would truly be challenging, especially to Small and Medium sized enterprises, real estate companies and even manufacturing firms. A slowdown in economic performance is expected from all of these, but, it will not lead to a systemic breakdown, no, not yet. 

A breakdown will happen after 2010, when housing mortgages mature and the financial sector finds it hard to convert these into financial instruments. That breakdown unfortunately will be quite hard to solve, even by transfusions from the national government.