I doubt, however, whether any of the presidential candidates would talk candidly about his exit plan during the political campaign. Realistically, any exit plan will require a lot of pain and as such may not appeal to many voters. Nevertheless, he should be ready with one, and should be ready to work for public support for it when the time is right.

Rudiments of the exit plan

The exit plan will have to deal with the following problems: limited fiscal space, rising unemployment, weak social protection program, structural changes in Philippine exports, and risk of peso appreciation.

First is the limited fiscal space. The next president will inherit a huge national public debt (around P4.5 trillion), a low tax-to-GDP ratio (about 11% to 12%) and rising expectation for more government spending for education, health care, and social welfare. His first order of business is to fix the shaky fiscal house. He has to reform the tax system aggressively. The legislation should be done quickly, preferably within the first 100 days, but the implementation should be calibrated.

Second is the high and rising joblessness. Even before the global economic crisis, the Philippine jobs market was already in a critical state. One out of five Filipino workers are either unemployed or underemployed, according to official statistics. The recent Social Weather Stations (SWS) survey results showed that some 10 million Filipino workers are unemployed.

But this problem will not go away soon. Analysts see a jobless economic recovery. In the order of things, the jobs market will be the last to recover. After the financial market mends, the real market would follow, and only then will the jobs market recover.

The third aspect of the exit plan is the weak social protection program. This is one of the things that emerged from the current crisis. Rising unemployment leads to instant poverty and consequently hunger incidence. A worker who has lost his job — or can’t find employment — is immediately challenged with feeding himself; or if he is a family man, he faces the added task of feeding, educating, and providing health care to his children.

On the spending side, there will be pressure on the next president to provide greater coverage for the conditional cash transfer program and universal health care.

The fourth aspect of the exit plan is what to do with the severely weakened manufacturing sector, which in the past has been a major source of output and employment. The next president has to immediately identify the new sources of growth. Manufactured exports are likely to be not one of them.

The heavy reliance of Philippine exports on electronics and machinery parts has become a major source of despair and uncertainty. Global trade may not be back to its pre-crisis level anytime soon. With the demand for electronics products sputtering and the shift to smaller, more fuel-efficient, potentially electric-powered cars gaining momentum, there may be less demand for the type of export products that Philippine factories produce. The brutal question then is whether the slowdown in Philippine exports transitory or permanent? And certainly, it does not help that many export-oriented firms — from Intel to Goodyear — have actually closed shop during the crisis.

Risk of peso appreciation

The risk of a peso appreciation is perhaps the trickiest aspect of the exit plan. Analysts see the massive flow of “hot money” into emerging economies like the Philippines. Given the massive liquidity introduced in the US and other developed economies, and given the still weak real economy, then many analysts see that a big chunk of the liquidity would show up in the equity markets of emerging economies. This explains the brisk and higher activity in the Philippine stock market. One wonders if the stock market is in for a correction soon.

The risk of a peso appreciation flows from the long-term sustainability of the US economy. For long-term sustainability, the US has to solve its twin (trade and budget) deficit problem. The US has to export more and import less. One way of achieving this is for the US dollar to weaken; by implication, for the peso to appreciate.

But what happens when the peso appreciates sharply to, say, P40 to US$1? It would spell disaster to the already troubled Philippine exporters. But it would be equally devastating to the families of some 9 million overseas Filipino workers. With the peso value of remittances shrinking, personal consumption spending would contract too. A combination of slower exports and shrinking consumer spending could tip the economy back into a severe economic slowdown.

In order to avoid a sharp appreciation of the peso, monetary authorities have to be bolder. They have to use part of the gross international reserves for servicing our foreign debt. We don’t have to borrow money from commercial sources, at relatively high rates, while BSP is sitting on $40-billion international reserves. BSP should also consider some form of foreign exchange control on portfolio investments. By its nature, “hot money” has a way of exacerbating a problem — it exits quickly when it smells trouble.

Source: Benjamin E. Diokno

The independent study by Hudson called Talent Tightrope: Managing the Workplace through the Downturn found that almost 74% of accounting and finance professionals say their stress has risen as a result of the GFC, 20% higher than the average.

In addition, 56% of accounting and finance professionals said they valued their jobs more than before the downturn, although half of all employees are seeking a new role.

The study found a slight discrepancy in perceived loyalty; 43% of employers think employees have become more loyal, while only 20% of employees report greater loyalty.

In fact, employers consistently viewed employee sentiment as being twice that as the figures showed in terms of job security, perceived stress levels, morale, or motivation.

“In every aspect of current workplace sentiment, whether job satisfaction, motivation, morale, perceived stress levels or job security employers are clearly unaware of their employees’ frame of mind,” said Mark Steyn, CEO Hudson A/NZ. “For example, nearly half (44%) of the 2,394 employees surveyed indicated that worker morale has plummeted. In contrast, only 26% of the 247 employers interviewed acknowledge that workplace morale has dropped.

Source: Andrea Lavigne

In a statement, NP spokesperson and former Cavite Rep. Gilbert Remulla warned that the recession in other countries will result in a growing number of jobless Filipinos.

Remulla said that hundreds of migrant workers will return home if the global financial meltdown is not resolved.

Citing latest figures, Remulla said there are now 4.2 million unemployed Filipinos and 6.6 million underemployed.

This number of unemployed Filipinos is expected to increase in the next few years as the local economy, particularly the exports sector, continues to feel the impact of the global recession, the former solon said.

“The government should stop claiming that the Philippines remains  resilient in the global financial crisis because it is not. We need to face this crisis head on by pushing for job creation programs and providing stimulus package to the local industries,” Remulla said.

The stimulus plan should cover the small and medium scale industries that comprise 95 per cent of the local economy, the NPC spokesman said.

He said the government should prioritize the stimulus package for vulnerable sectors like manufacturing, garments and textiles and even information technology (IT) industries.

Source: Jester P. Manalastas

Money sent home by Filipinos based in the United States has dropped for the first time in memory.

For the first four months of 2009, remittances from the US stood at $2.287 billion, a $300 million or 10.4 percent decline from the January-April 2008 inflow of $2.553 billion.

The US is the country’s biggest source of remittances, accounting for 41 percent of inflow in April.

The slowdown indicates that US-based Pinoys were starting to feel the effects of the American economic crisis.

Cumulative remittances during the first four months stood at $5.5 billion, up by 2.6 percent from the same period in 2008.

While this bucked forecast of a downturn, the growth was way below the double-digits rates in the past.

Money sent home by overseas Filipinos based in the United Kingdom also went down by 9.45 percent, from $294 million to $266 million.

Remittances from Canada, in contrast, surged by 65 percent from $344 million to $567 million.

Remittances from Saudi Arabia were also up by 17.6 percent to $483 million from $411 million.

Overseas Filipinos in Japan also sent more money home, increasing by as much as 53 percent from $164 million to $251 million.

In April, remittances stood at $1.4 billion, up.2 percent year on year.

BSP said the 2.6 percent growth registered in the first four months of 2009 was supported by higher remittances from both sea-based and land-based workers of 2.5 percent and 2.6 percent, respectively.

A report from the Philippine Overseas Employment Administration (POEA) said demand for Filipino workers abroad remained broadly strong.

As of end-May 2009, a total of 758,412 active job orders had been reported, of which 37 percent had been processed while 63 percent were still to be filled up.

POEA said the bulk of the job orders was in the production, services, and professional skill categories.

“Demand for Filipino workers abroad is expected to be sustained by employment opportunities gained from hiring agreements forged between the Philippines and host countries in need of Filipino manpower for their development and construction needs, such as Qatar, Saudi Arabia, Canada and Australia, among others,” PEOA said.

While weaker global economic conditions continued to pose some risk to the continued strength of the deployment of Filipino workers abroad, the government remains focused on job generation programs to help displaced overseas workers find alternative jobs in emerging markets and in countries that are not severely affected by the global financial meltdown, it said.

Source: Jimmy C. Calapati

The April figure was also slightly lower than that of January, when unemployment was reported at 7.7 percent.

Based on the National Statistics Office’s latest Labor Force Survey, the number of new jobs created outpaced the number of those who joined the country’s horde of workers.

There were some 1.37 million people 15 years and older who had joined the labor force—beefing it up by 3.8 percent to 37.82 million—in April from 36.45 million in the same month of 2008.

Of these, 34.99 million have jobs—about 1.458 million more than the 33.54 million seen last year.

Also, the unemployed numbered 2.83 million in April, or some 84,000 less than the 2.914 million jobless reported a year ago.

“It is worth noting that the unemployment rate in April this year was almost as good as the April 2007 unemployment rate of 7.4 percent, the year when the economy had posted a 7.1-percent growth,” Economic Planning Secretary Ralph G. Recto said.

However, the underemployment rate—those with jobs but want to work more—climbed slightly to 18.9 percent in April against 18.2 percent in January.

Analysts said the rise in the underemployment rate pointed to mounting pressures on the labor market, aggravated by returning Filipino workers who lost their jobs overseas due to the global recession.

“There is clearly pressure on the labor market, not just due to economic slowdown, but also going forward with remittance growth showing further downside,” said Simon Wong, economist at Standard Chartered Bank in Hong Kong.

The underemployed workers climbed to 6.62 million from 6.24 million in the same period. Of the total underemployed, 62.6 percent worked less than 40 hours a week in April, higher than 60.8 percent in January.

“While people seem to be busy, it is not the full 8 hours or 40 hours a week, so that is where the weakness of the recent statistics may come in,” said Jun Trinidad, economist at Citigroup. “This suggests that it can still encourage people not to spend.”

Also, the Philippines has the second highest jobless rate among the biggest Southeast Asian economies. It is behind Indonesia which reported an unemployment rate of 8.14 percent as of February.

Thailand’s jobless rate was at 1.9 percent in February, below Malaysia’s 3.3 percent at end 2008. Singapore’s first quarter seasonally adjusted jobless rate was 3.3 percent, a three-year high.

Job cuts and reduced work hours in the Philippines have been on the rise, mainly in the electronics sector, which account for over half of the country’s exports, with demand still weak.

Officials said last month the economy’s 2.3 percent contraction in the first quarter was partly due to weak personal spending as people saved their money due to the uncertainty on the depth of the global downturn.

At least 6,500 Filipino workers returned from abroad, mainly Taiwan, since October as the global recession hit the manufacturing sector, based on data from the overseas workers welfare agency.

Data from the Department of Labor and Employment show that from October 2008 to March 2009, the global financial crisis took its toll on a total of 109,429 domestic workers.

The Department of Labor and Employment was heartened by the slight dip in the unemployment rate, saying it showed that the government’s effort to mitigate the effects of the crisis on labor were effective.

Source: Ronnel Domingo

Philippine Embassy officials’ hands were tied, sources said, as they feared sanctions from Malacañang, being aware of the recent recall of the former Philippine ambassador to the Court of St. James.

The officials generally kept away from the OFWs activities which Estrada had graced, and kept their distance from the former President.

The Filipino groups, which are private groups, refused the pleas of Middle East Philippine embassy officials to withdraw their invitation to Estrada as their guest speaker.

While Estrada was mobbed by Filipino workers, whether in Kuwait or Abu Dhabi, he was reportedly not accorded the same courtesy due a former Philippine president by embassy officials, sources coming from the groups of OFWs who organized the Independence Day celebration, told the Tribune, in an e-mail message.

But not only were Estrada and his son, Senate Pro-Tem president Jinggoy Estrada mobbed by the OFWs in the airports and other sites where a gathering of Filipino workers were at, but that they had even volunteered to be his leaders of the Jeep ni Erap organization, within the Middle East.

The Jeep ni Erap organization was Estrada’s grassroots support in the 1998 presidential elections.

Estrada’s JEEP ni Erap was re-launched this year in Legazpi City.

JEEP stands for Justice, Economy, Environment and Peace.

The OFWs in the Middle East also clamored for Estrada to seek the presidency again, saying it was a great injustice done him by the Arroyo government when he was ousted by a coup d’etat initiated by then Vice President Gloria Arroyo and treacherous military officers, along with civil society groups.

Sources told the Tribune that the Erap magic is still there and it is only Estrada whom they feel can help them in having a better life back home.

Earlier, seeing and hearing the plight of some 100 OFWs who wanted to return to the country but had no wherewhithal to do so, Estrada offered to fly at least 50 of these OFWs home, undertaking the trips’ expenses.

The Estrada camp reported that the former President had given the needed money for the air tickets to Labor Attache, Josephus Jimenez, for him to take charge of the tickets for the return of the OFWs.

While in Abu Dhabi, the former President met with a human rights leader there and visited some 170 abused Filipinas, most of whom were raped, and pregnant and living under very inhumane conditions.

At least 15 women to a room were said to share just one toilet in that shelter.

Estrada then donated some $10,000 to this human rights group for the building of more toilets for the abused OFWs.

The abused women cried and told their tale of woe to Estrada and begged him to have the Arroyo government discourage Filipino women from working in the Middle East, if only to spare other Filipinas from being abused, raped and made pregnant, then left to fend for themselves.

What is worse, the sources from the Filipino organizations in the Middle East said is that if the Filipina domestics fight back and accuse their employers of having abused them, they end up in jail instead of their abusive employers.

They also complained that the Arroyo government hardly pays any heed to their plaints, save for the usual “lip servce.”

The Arroyo government is known for actively encouraging more and more poor Filipinos to leave the country and seek jobs abroad, especially in the Middle East where OFWs are plentiful as the Arroyo government relies on their remittances to keep the economy afloat.

Meanwhile, Senator Jinggoy and his father, also lauded Qatar Airways, considered as the “world’s five-star airlines,” for being a key supporter of overseas Filipino workers, noting that the company, for years now, has been generously assisting OFWs based in Kuwait especially those in distress.

Qatar Airways, they also learned, has been giving free tickets to distressed OFW’s who come home to the Philippines from Kuwait via the company’s flights.

Further, Qatar Airways also said it will come up with a plan on how to extend more help to distressed OFWs, not only in Kuwait , but also in the other parts of the Gulf Region.

The Estradas had a meeting with Qatar Airways’s Senior Vice President – Commercial (SVPC), Mr. Ali Al Rais, and the company’s Kuwait Area Manager, Mr. Mohammed Al Jumairi on June 11 at the Costa Del Sol Hotel, Kuwait.

“We were very much elated to learn that for many years now, Qatar Airways has been supportive of, and has been sponsoring and participating in, activities organized by the Filipino associations in Kuwait in cooperation with the Philippine Embassy there, and that a large part of the proceeds of the company’s programs are being donated to distressed OFWs at the Philippine Embassy shelter,” the senator said.

Qatar Airways, flag carrier of Qatar based in Doha, has offices and operation in 80 international destinations, including Kuwait.

The Estradas expressed deep appreciation to Qatar Airways’ commitment to social responsibility especially toward OFWs and said they hoped the airline company would continue to help the Filipinos in Kuwait and from all over the world.

The Estrada delegation graced the Philippine Independence Day celebration of the Filipino community in that country, during which the senator also dialogued with the OFWs as well as diplomatic and labor officials to check on the labor condition there.

The Estradas also rode the “Qatar Airways Jeepney”, the one and only such vehicle being used in Kuwait which has become a great source of pride among Filipinos there and through which they relate their roots, culture and spirit of nationalism to fellow Filipinos as well as to other nationalities in their host country.

Source: Daily Tribune

Teresita Peralta, chief of the Bureau of Labor and Employment Statistics (BLES), said on Wednesday, workers in the informal sector reached 16.5 million so far in 2009, due to the effect of the worldwide economic downturn.

Citing a recent survey of BLES, Peralta said most of the workers in the informal sector were displaced employees from companies, which shut down because of financial troubles.

According to the National Statistical Office, there were 10.5 million self-employed Filipinos in 2008.

The figure included 1.3 million workers employed in family-run businesses.

“We now see an increase in the number of workers in the informal sector and our initial findings is that we have at least 50 percent of the total (labor force) are now self-employed,” Peralta said in a press briefing.

Peralta said the increase in the number of self-employed workers only showed the importance of the informal sector in keeping the economy afloat.

“We have a large economy and it is during this crisis that our informal sector comes to the fore,” she said.

The informal sector, she added, also helped in keeping the country’s unemployment rate to a manageable level.

Peralta said the unemployment rate during the first quarter of 2009 was recorded at around 7.7 percent, and they were expecting the final rate of unemployment for the month of April to be at the same level.

To help laid off workers, the Department of Labor and Employment (Dole) will hold a three-day job fair at the Luneta Grandstand in Manila from June 12-14.

Raymond Agravante, DOLE regional director in Metro Manila, said over 105,000 jobs in government-owned agencies and private companies would be available for prospective applicants.

Source: Marlon Ramos

Labor Secretary Marianito Roque said the fair, dubbed “Jobapolooza ’09” also referred 16,442 job seekers for employment in participating firms that offered highly in-demand jobs.

Such in-demand jobs include those in business processing outsourcing, information technology services, wholesale and retail, construction, food and beverage, hotels and restaurants, and manufacturing.

Source: Jerome Aning

The President said tourism can provide jobs for both the “most-skilled” and the “least-skilled” people. She pointed to the example of Boracay and its luxury hotels as well as the medium and small enterprises there that were all keeping lots of people employed.

Then she brought up a job generation program of the Philippine Tourism Authority (PTA). It goes by the acronym GREET, which in full is Grassroots Entrepreneurship for Eco-Tourism.

But up to now the Tourism Act of 2009 is still waiting for the President’s signature, after it was announced that she was going to enact it soon after its passage by Congress.

Sen. Gordon predicts a ‘tourism rush’

Its main author, Sen. Richard Gordon, says “The new tourism law will challenge every Filipino to engage in a ‘tourism rush’ where all are enjoined to put their stake in new areas that can be developed and promoted as tourism destinations,” the independent senator said.

The law would provide for the establishment of Tourism Enterprise Zones (TEZ) and the creation of a Tourism Infrastructure and Enterprise Zone Authority (Tieza). A TEZ, says the law, is “any geographic area that is capable of being defined into one contiguous territory; it has historical and cultural significance, environmental beauty, or existing or potential integrated leisure facilities within its bounds or within reasonable distances from it.”

Local government together with private enterprises may apply for the establishment of a TEZ in areas suited for tourism. Within each TEZ, entrepreneurs locating there will be entitled to incentives previously given only to industrial locators.

Gordon warns that the hoped-for new tourism law he authored is not “manna from heaven”—it is instead “a challenge for Filipinos to take stock in—invest in and work on—the beauty of their homeland and the talents of their countrymen.”

“We already have everything we need to become one of the biggest tourism destinations in the world but it will not come without hard work,” Gordon said.

A former Tourism secretary, Gordon has been calling on Filipinos with an entrepreneurial bent to spot places in their home provinces that can be developed and promoted as tourism destinations. Then they could, working with their local officials, and tourism officials, prepare it for development as tourist spots.

Gordon mentions the examples of specific attractions that, with the development of tourism facilities in the localities, became world-famous Philippine tourist destinations. “Donsol in Sorsogon grew immensely after catching the eye of Whale Watchers. The Masskara Festival of Bacolod took the city and its people out of the doldrums that the decline of the sugar industry brought about,” he said. “With the Tourism Act soon to be in place, can imagine even some of our more impoverished provinces transformed into tourist havens.”

But that will come only with the Tourism Act of 2009.

More land-grabbing, displacements

Arguments are raised against the Tourism Act 2009. They have been best articulated by the Ibon Foundation, which recently issued an article titled with the warning “More Land Grabbing, More Displacement.”

Ibon warns that “with this law, land use conversion of farmlands and privatization of coastal areas will intensify. The reclassification of lands for tourism means only one thing for rural families, and this is the large-scale physical and economic displacement of farmers and fisherfolk communities.”

And the “law will reinforce various questionable issuances by the Arroyo and past governments declaring certain areas in the country as tourism zones.” In these tourism zones, Ibon points out, there are disputes about the conversion of rice lands, sugar farms, coastal areas and fishing grounds into tourism zones that displace thousands of local farmers and fisherfolk who are deprived of their usual livelihood.

Ibon also voiced arguments to show that tourism as a solution to the unemployment crisis created by the financial crisis and the economic meltdown is not reliable. It cites a paper presented in the 2008 United Nations World Tourism Organization (UNWTO) conference last year reporting “that the loss of livelihoods in agriculture through tourism and the high out-migration of locals from tourism areas indicate that tourism destroys more jobs than it creates.” For, labor statistics show that “the tourism sector employs roughly 10 percent of the labor force” but “official employment data in the agriculture sector is 35 percent, but is believed to even reach 75 percent when agriculture-related jobs are taken into account.”

Ibon also points out that “The agriculture sector’s contribution to the economy is also undoubtedly more significant at 18 percent of the country’s gross domestic product [GDP], compared to tourism’s 7 percent. A Department of Tourism study even estimated that tourism’s direct contribution to the country’s economy is only 2 percent of the GDP.”

Revive agricultural and industrial sectors

For sure, we must rebuild our damaged and thwarted agricultural and industrial bases. These are key sectors of our economy. Their infirmity—along with official corruption—cause massive poverty in the Philippines.

What to do with the Tourism Act of 2009? Enact it.

But all Filipinos must vigilantly make sure that the law’s implementing rules and regulations, and its actual implementation, do not produce the horrible effects predicted by Ibon. Tourism must not interfere with imperative and vital efforts to rebuild our agricultural and industrial sectors

Source: Manila Times

The jobs lost in the manufacturing sector alone accounted for 62 percent or 112,000 of the increase in the ranks of the unemployed during the period, results of the January 2009 Labor Force Survey conducted by the NSO show.

The financial sector accounted for 28,000 jobs; construction, 17,000; and transport, storage and communication, 15,000.

The NSO said there were 2.855 million jobless Filipinos in the first month of 2009 compared with the 2.675 million in the same month last year.

The regions that registered unemployment rates higher than the national average were Metro Manila (14 percent), Calabarzon (10.9 percent), Central Luzon (9.7 percent), Ilocos (8.5 percent) and Eastern Visayas (7.8 percent).

Assistant Secretary Reydeluz Conferido Tuesday said that the unemployment situation worsened because of the global economic crisis.

Conferido said the Department of Labor and Employment (DoLE) expected the jobless rate to rise as a result of the economic slowdown that led companies to either close or cut down production.

Effects of crisis

“We had said that we will feel the effects of the financial crisis in the first quarter. The unemployment situation worsened a bit. But it’s not dramatic compared with those in the United States and Japan,” he said.

Young people, or those aged 15-24 years old, comprised about half of the unemployed at 49.2 percent.

Those in the prime working age of 25-54 years old accounted for 46.6 percent of the jobless. About 4.2 percent or 119,000 are aged 55 years old and above.

Of those who were employed, 36.3 percent only had part-time work of less than 40 hours a week.

Conferido said the NSO findings were “consistent” with the reports his office received from local DoLE offices.

Host of export industries

He also noted that the unemployment situation in Metro Manila, the Visayas, and Southern Tagalog were not surprising because these regions were hosting large export-oriented industries adversely affected by the global downturn.

The fear that the crisis would displace more women than men was unfounded as nearly two in every three unemployed workers were male. Many of the electronics and garments factories that laid off workers or shut down employed women.

Male-dominated sectors

Conferido said he was initially “puzzled” by the results, but said this could be attributed to the fact that male-dominated sectors like construction and transport were heavily affected.

Of the employed, 51.2 percent worked in the services sector, 34.6 percent in agriculture, and only 14.2 percent in the industrial sector.

The number of Filipinos who opted out of the labor force grew by some 520,000 to 21.54 million from 21.02 million.

Discouraged

This could mean more Filipinos, discouraged by the tight labor market, have stopped looking for work or more Filipinos returned to school or entered retraining programs, Conferido said.

The NSO defines the unemployed as those aged 15 years and over, who have no jobs or are not running a business and are actively looking for jobs but can not find any.

The unemployed also include those who at the time of the survey were not looking for jobs because they believed there were none available, or because of temporary disability or sickness or bad weather, or because they had pending job applications or interviews.

The underemployed are those who want to have additional hours of work in their present job or to have an additional job, or to have a new job with longer working hours.

Unskilled workers registered the largest group at 31.9 percent of the employed in January 2009. Farmers, forestry workers and fishermen were the second largest group, accounting for 17.3 percent of the total.

There are now 58.7 million Filipinos of working age or 1.3 million more than the 57.4 million recorded last year.

Bright spots

Despite the bleak results of the NSO survey, Conferido said there were bright spots in the labor market.

He noted that the underemployment rate declined slightly to 18.2 percent from 18.9 percent and the number of wage and salary earners grew 2.8 percent to 488,000.

The number of employers also rose to 1.42 million from 1.28 million. This could mean more Filipinos have become entrepreneurs, Conferido said.

He also noted that the wholesale and retail sector, real estate, renting and business activities, and education sector expanded and created new jobs in 2009

Source: Kristine L. Alave