Massive Layoffs Signal Global Depression: Review of Labor Situation in the Philippines

Ecumenical Institute for Labor Education and Research, Inc.

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.

From bad to worse

Disparities between the nominal and family living wages continue to widen. In the NCR alone where the family living wage is at P904 and the nominal wage including the cost of living allowances is at P382 last year , the wage gap is already pegged at P522 or a staggering 42.3% 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% from 2.8% growth rate in 2007. Sectors of industry that which suffered the most were manufacturing, commodity and service exports. Overall industry sector employment fell by 1.5%, 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% 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.

Silent but ruthless repression

The Department of Labor and Employment dubbed 2008 as a historic milestone as it posted only 5 strikes – the lowest rate in seven years. Last year was boasted as a year of industrial peace but the reality underneath such "still waters" is very alarming.

The Center for Trade Union and Human Rights (CTUHR) recorded 211 new cases of trade union and human rights violations nationwide from January to November 2008. This is 23.7% higher than the 161 cases recorded in 2007. Almost half of these or 105 cases are violations to civil-political rights of workers including harassments, grave threats and killings of workers and labor advocates.

Three union leaders – Gerardo Cristobal of Samahan ng Manggagawa sa EMI-Yasaki-Independent, Maximo Baranda of Compostela Workers Association, and Rolando Antolihao of Global Fruits/ Lapanday Food Corporation were felled by bullets last year.

On the other hand, more than half or 106 cases are violation to economic, social and cultural rights of workers. Workers experienced ruthless attacks on their picket lines and peaceful collective actions.

A patent Martial Law tactic used by the Marcos dictatorship to quell labor unrest was recently revived. It involves the arbitrary arrest and filing of criminal cases against union leaders and advocates. About 12 cases were reported already including the illegal arrest of Atty. Remigio Saladero, legal counsel of the militant labor center Kilusang Mayo Uno (KMU) and Executive Director of the Pro-Labor Center (PLACE). He is only one of 71 leaders of progressive organizations in Southern Tagalog – 13 of whom were union leaders and labor advocates – who were charged with various common crimes.

These trade union and human rights violations are meant to cripple the independent workers' movement. Its chilling effect certainly has contributed to the weakening of trade unionism in the Philippines, , with the organized private sector now being only at 10.54% of the total workforce.

More storms ahead

This year, more layoffs are expected in the electronics, garments and other export sectors. The BPO will continue to have jitters with regards to job retention. Accenture Manila was reported to have dropped hundreds of workers this month. Intel Corp.,a California-based and the first semiconductor firm established in the country, will shutter its Cavite factory, laying off 1,800 workers. This number will put the number of retrenched workers in the semiconductor industry due to the economic downturn to 5,000 workers.

About 40,000 workers in Calabarzon (Cavite, Laguna, Batangas, Rizal and Quezon) stand to lose their jobs by the first half of the year according to PAMANTIK-KMU, mostly from the electronics and car manufacturing industries in the export processing zone. Amkor Technology Inc. will lay off 2,000 regular workforce by February. Workers of Samsung, Yazaki, F-Tech, Fujitsu, NEC, TDK, and Matsushita will also face layoff in the first quarter.

In Calabarzon, car manufacturing companies affected by the global financial crisis implemented compressed work week and other schemes that would likely lead to retrenchments.

Starting January, Toyota Motor Philippines implemented a Monday-no-production day and will "temporarily" get rid of its 500 contractuals and on-the-job trainees (OJT) by March.

Nissan retrenched 40 regulars in December 2008. The company will retrench 70 more workers in February. Keihin-Philippines plans to implement a four-day work month this February. Ford now maintains only 18 employees out of the previously 400 workforce. Isuzu-Philippines will soon follow the footsteps of its mother company, which displaced 30,000 Japanese employees.

Ford RP unit is open to lay-off options if the "industry continues its decline".

Flexible work such as compressed work-week, contractualization and other flexible measures will be employed. The labor department approximates that at least 19, 000 workers are now covered by various cost-cutting measures such as reduced work-weeks, work hours or operations.

More taxes will be imposed by the government and the poor will definitely be forced to carry the burden. No wage hike will be given to the workers so that their families can weather out the current crisis in a reasonably humane way.

There is doubt that the government can meet its target creation of three million jobs this year. Even the seemingly rock-solid option of relying on labor export will be squeezed as OFWs continue to lose jobs abroad. Some 60,000 OFWs face the prospect of job loss by the first quarter of 2009.

The way forward

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 brunt of the crisis. But, safeguarding workers' welfare amid the crisis should be concrete – such as through wage hikes and price controls – which could soften the shock on dwindling incomes and falling living standards. A serious evaluation of the job generation scheme of the government should also be made to refocus the country to national industrialization, which would push economic capacity and accelerate jobs creation .

Safeguarding workers' welfare are also being consciously advanced by the workers themselves. In a landmark victory in 2008, women workers of Bleustar Manufacturing and Marketing Corporation (BMMC), maker of Advan shoes, have struggled against sexual harassment in the workplace and for better working conditions through building their union. Through a strike, they have asserted their rights. Workers of the Kowloon Restaurant along West Avenue in Quezon City were able to secured an initial victory after four months of strike. The National Labor Relations Commission, in its decision dated December 22 ordered the reinstatement of all dismissed workers with full back wages.

Amidst the rising storm of a global economic depression unprecedented since the 1930s, only the workers' own concerted actions to better their lot offer any glimmer of hope. The following years will certainly be a landmark of sorts in the history of workers' struggles not only in the Philippines, but also in other parts of the globe.