Signs of the Time

NOTE: The following article was written by Mr. Gener Luis Morada of Internet Cafe Association of Imus (ICAII) Inc.

When the news broke about the world financial crisis in the third quarter of last year it seems that the Philippines would not feel its effect. Government constantly reassured us that the Philippine economy is such a stable condition that it would be able to weather the storm of this impeding crisis that is about to hit the country. Now 24 days into the new year, it seems that the situation is worst that what government would like us to believe. For the last three days, the Philippine Daily Inquirer has for its headline the deteriorating unemployment situation in the country with the announcement of closure and lay offs by some multinational companies.

Intel’s closure was not really a surprise. For rumors has been going around since last year that it would close its plant in General Trias, Cavite. I believed that it is just using the global financial crisis as an excuse to relocate to another country. It was a matter of the state of business competitiveness of the Philippines as compared to the other emerging markets in Asia. Who would have guessed that 40 years down the road China would reawaken to be an industrial giant of Asia closely followed by Vietnam who in the 1960’s was just a country wreck in turmoil.

Even Labor Secretary Marianito Roque is alarmed with the deteriorating situation. From December 1, 2008 to January 19, 2009 a total of 15,600 local workers have lost their jobs and over the same period 19,000 local workers have their shifts or working hours reduced. This data does not include the thousands of Overseas Filipino Workers who are coming home due to closure of their companies abroad. One would also have to take into consideration that the unemployment rate would futher increase once the new batch of college graduates comes into the picture after their graduation this coming March of 2009.

The closure of the Intel plant is just the “tip of the iceberg” and the Arroyo government should brace for more layoffs, plant shutdowns and dire economic indicators that will continue beyond 2010, economic and labor experts said on Friday.

The most optimistic forecast is that the US economy will recover in 2010. The Philippines’ recovery will come after that. The Philippines’ recovery cannot precede that,” said Benjamin Diokno, a former labor secretary at a labor forum at the Asian Institute of Management sponsored by the Blas F. Ople Policy Center.

And even if the US and other major economies recover next year, their revival “will not be a strong one,” he said.”


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