Special Report:Global Financial Crisis
By Prime Sarmiento
MANILA, March 1 (Chinese media) -- Unemployment rate in the Philippines is
expected to remain high in the next few months as the global economic crisis
crimps business activities, analysts said.
The Philippines has one of the highest unemployment level in Southeast
Asia, standing at 6.8 percent as of October 2008, according to the country's
National Statistics Office.
The global economic turmoil has dampened demand in Japan, the United States
and Western Europe -- large markets for Philippine export goods, services and
migrant workers. As these markets contracted, so did the demand for Philippine
labor.
"Workers will always be the victims in a recession," said Father Edwin
Corros, executive secretary of the Catholic Bishops Conference of the
Philippines' Episcopal Commission on Migrants and Itinerants.
"When there's no demand for your products, how can you continue to hire
people to make your products?" said Rene Cristobal, vice president of the
Employers Confederation of the Philippines, Inc. (ECOP). Cristobal said several
of ECOP's member-companies have to lay off workers as they either close shops or
reduce their output.
Analysts said the most vulnerable workers are those in the export-oriented
industries such as electronics and textile manufacturing. "The recession in our
trading partners has hit our exports sector hard," said Philippine
Socio-Economic Planning Secretary Ralph Recto. Philippine economic planners
expect export receipts to fall this year and this doesn't bode well for workers,
especially for those employed in labor-intensive manufacturing companies.
Indeed, several companies reported either laying off workers or cutting
working hours as the crisis reduced demand for Philippine exports.
In Luzon, northern Philippines, Intel Corp., the first U.S. semiconductor
firm that established a facility in the Philippines, shut down its factory and
retrenched 1,800 workers. In Cebu, southern Philippines, furniture maker and
exporter Giardini del Sole Inc. has temporarily shut down and laid off about 250
workers as a result of the financial crisis.
The Philippine Labor Department reported that 40,000 workers were
retrenched, 33,000 workers are experiencing shorter working hours while over
5,400 overseas Filipino workers were displaced because of the crisis.
Dennis Arroyo, director of national planning and policy of the National
Economic and Development Authority, forecast that as much as 200,000 workers may
be laid off as the crisis continues to hurt the local economy.
However, the director doesn't expect the unemployment level to hit
double-digit levels which were recorded several years ago. In a paper issued
last month, Josef T. Yap, president of the Philippine Institute for Development
Studies, expect unemployment levels to stay at current levels.
"Assuming that the economy will not decelerate further in 2009, there is
reason to be cautiously optimistic that the unemployment rate will not rise
beyond 6.8 percent in the next few months," he said.
Recto conceded the crisis will pressure the employment situation, but he
believed that the strong macroeconomic fundamentals combined with the
330-billion-peso (about 6.84 billion U.S. dollars) stimulus package will cap the
growth in unemployment rate.
For this year, despite the global recession, the Philippine GDP is expected
to expand at 3.7 percent to 4.4 percent. Recto said the easing of inflation
(estimated to hit 3.9 percent this year compared to last year's 9.3 percent)
will boost consumption and keep the economy afloat. The stimulus package -- the
bulk of which will be used to build infrastructures -- will create 800,000 new
jobs.
Luz Lorenzo, regional economist of the ATR Kim Eng Securities, agrees that
the consumption driving Philippine economy will be resilient this year. But such
economic growth, she said, is not high enough to absorb the burgeoning labor
force.
"The economy will not fall in the deep end. But neither will it be a bed of
roses. Unemployment will remain a problem," she said.
Migration: by need not by
choice
The lack of opportunities in the Philippines will force most Filipinos to
seek greener pastures abroad. Every year, around one million Filipinos go
overseas, mostly forced to leave their families to provide them with a better
life.
Father Corros said most of the retrenched migrant workers that the
Episcopal Commission on Migrants and Itinerants has been assisting in the past
few months still prefer to work overseas instead of just staying in their own
country.
"Migrating is the only option for them because they can't find jobs here,"
he said, adding that "we go back to the same problem. They go abroad because
it's difficult to look for jobs here."
The Philippines is one of the world's biggest labor exporters, with 10
percent of its over 80 million population living abroad. Migration has long been
part of the Philippine government's strategy to solve the unemployment problem.
This policy started in the 1970s when then Philippine President Ferdinand
Marcos, faced with huge levels of foreign debt and the oil crisis, sent
construction workers to the Middle East. This was done to rein in the rising
unemployment levels and avoid growing social unrest. Thirty years later,
Filipinos continue to leave in droves -- working as entertainers, domestic
helpers, nurses, caregivers, seafarers and programmers.
The global crisis may have slowed businesses and even retrenched more than
5,000 Filipino migrant workers but analysts and government officials believed
that there will be demand for Philippine labor abroad.
Philippine President Gloria Macapagal-Arroyo directed the Philippine
Overseas Employment Administration to aggressively market Filipino labor and
expertise abroad.
This kind of policy has long been criticized by migrant rights advocates,
explaining that migration, although it brought in the much needed remittances,
also caused social problems. Numerous migrant workers have been physically and
sexually abused and have to endure exploitative working conditions.
The separation also breaks family ties and hurt the children who were left
behind by their parents. What is needed, they said, is for the government to
develop an economy that will provide decent jobs and will make migration a
choice, not a necessity, for most of the country's labor force.
The current global economic crisis, however, doesn't offer such option. The
country's economic managers said one of the factors that will support the
consumption-driven economy is the steady inflow of remittances. Labor deployment
will therefore remain a key government policy.
"We see a steady labor demand in the Middle East, Australia and elsewhere
which are responding to the crisis by embarking on infrastructure projects with
their own stimulus packages," Recto said in last week's economic briefing.
Analysts said most Filipinos in the United States -- one of the top
destination countries for Filipino migrants -- will keep their jobs as they're
usually employed in the recession-proof healthcare sectors. Industrialized
economies with aging populations will continue to seek cheap, English-proficient
and skilled nurses and caregivers from countries like the Philippines.
The Philippines is one of the world's biggest exporters of health care
workers. Every year, over 8,000 Filipino nurses and 14,000 caregivers were
deployed.
Outsourcing industry offers new
jobs
There are some bright spots in the domestic labor market. The business
process outsourcing (BPO) industry is expected to remain bullish. BPO revenues
are forecasted to grow by 20 percent to 30 percent this year and companies
expected to hire 100,000 new workers.
"A lot of companies are under a lot of pressure to cut cost so I think it
will accelerate outsourcing," said Alfredo Ayala, CEO of Live It Solutions,
Inc., the holding company for Ayala Corporation's investments in business
process outsourcing.
Call centers will remain the biggest revenue earner and employer in the BPO
sector. But BPO executives believe that the growing demand for the high-value
non-voice outsourcing sectors such as animation, software development and back
office will offer opportunities to the country's programmers, graphic designers
and accountants.
"Right now, we're really leading in the contact center sector. But now
we're trying to change that. We're trying to expand to the higher value
non-voice services," said Ma. Cristina Coronel, president of the Philippine
Software Industry Association.
Job openings, however, will not necessarily translate into full-time
employment. BPOs offer a lot of perks and benefits to its employees but very few
are qualified to work in the industry. To solve this problem, BPOs are offering
workshops and scholarships to expand its talent pool.
Dennis Posadas, deputy executive director of the Philippine Congressional
Commission on Science, Technology and Engineering, said that as far as
outsourcing in the information technology sector is concerned, very few are
qualified to take the jobs because many are not adequately trained. "We still
need to improve basic education in our pubic schools. They need to emphasize on
science and math education," he said.
Posts
No comments:
Post a Comment