Massive Layoffs Signal Global Depression

Published on January 31, 2009

The current deep recession that is expected to lead into a severe depression has began to kick into high gear in the Philippines in the first few weeks of the new year, portending worse things to come for the country’s 36-million strong labor force. Despite the government’s claims at “safeguarding” the workers “amidst the global storm”, the people and the ordinary workers will evidently be made to bear the heaviest blows of the crisis.

BY ECUMENICAL INSTITUTE FOR LABOR EDUCATION AND RESEARCH, INC.
Posted by (Bulatlat.com)

From bad to worse

Disparities between the nominal and family living wages continue to widen. In the National Capital Region (NCR) alone where the family living wage is at P904 ($20.328 at the 2008 exchange rate of $1=P44.47) and the nominal wage including the cost of living allowances is at P382 ($8.59) last year, the wage gap is already pegged at P522 ($11.73) or a staggering 42.3 percent difference.

This difference entails a lowering of living standards through belt tightening measures. In fact, the National Statistical Coordination Board (NSCB) said that poor Filipino families spent less on food as high prices of food eats up more than 60 percent of their budget.

The crisis definitely exacerbates the chronic poverty afflicting most sections of the population. Hunger incidence reached a new record high according to the fourth quarter of 2008 report on hunger by the Social Weather Stations (SWS) placing the estimated number of hungry families to 4.3 million.

Not “business as usual”

In 2008, official government statistics pronounced slowdown in employment to 1.8 percent from 2.8 percent growth rate in 2007. Sectors of industry that suffered the most were manufacturing, commodity and service exports. Overall industry sector employment fell by 1.5 percent, with the manufacturing subsector taking a heavy battering with an employment drop of 135,000 due to slowdown in exports.

“It is not business as usual”, observed the labor secretary with the mounting layoffs. The National Wages and Productivity Commission (NWPC) said the crisis will have great impact on these sectors – information technology (IT), electronics and semiconductors, mining and even fruits and vegetables producers.

Texas Instruments, one of the world’s biggest semiconductor manufacturers, has laid off 400 workers in December from its factory in the Baguio Economic Zone Authority (BEZA) due to the crisis. In the mining sector, 600 employees and contractors at the Berong nickel project in Palawan of the Toledo Mining Corp. (TMC) were laid off “on the presumption of an extended period of low demand and low nickel prices” due to the anticipation of prolonged recession.

Furniture exporters also have cut back on labor due to weakened demand in the US. In Mactan Economic Zone, Maithland Smith Ltd., a furniture company, and Taiyo Yuden Philippines, Inc. which produces cellular phones, also laid off workers.

Slowdowns and closures in garments factory in the Cavite Export Processing Zone were reported by the Solidarity of Cavite Workers (SCW).

Lafarge Cement Services and Cemex Philippines also laid off hundreds of workers, while Holcim Philippines Inc. in Misamis Oriental – another cement production firm – has reallocated its workers following the closure of a kiln due to the slowdown in the demand of the product.

Business process outsourcing (BPO) companies are also facing profit loss due to declining demand for subcontracted work. Advanced Contact Solutions (ACS), an Australian-based company was reported to have slashed 900 workers last year after losing a major US client.

Amkor Technology laid off all of its 3,000 contractual women workers in September 2008. Integrated Microelectronics Inc. (IMI), which previously employed 17,000 workers, also retrenched 3,000 contractual workers last December. IMI also implemented forced leaves to more than 1,000 regular workers in December 2008.

The Bureau of Labor and Employment Statistics pegged the unemployment rate for last year at 7.4 percent or 2.716 million. But IBON Foundation estimated that there were 4.1 million unemployed last year. With this underemployment figure, joblessness has worsened at 10.7 million.

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