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Resilient economy?

Posted by lenolea on February 2, 2009

After Intel, the world’s biggest computer chip maker, announced plans to close its testing facility in the Philippines, the Arroyo government could no longer hide the impact of the global economic crisis to the Philippines.

Labor Secretary Marianito Roque said that up to 60,000 jobs could be lost in the country’s key electronics sector.

In October last year, Mrs. Gloria Macapagal Arroyo even boasted that the Philippine economy is more resilient than it ever has been. She said economic reforms would enable the Philippine economy to weather the current storm.

Data gathered by independent think-tank Ibon Foundation tell otherwise. The Philippine economy is ever dependent on the US economy, now hit by recession.

Twenty percent of foreign investments are from the U.S., mostly in manufacturing, business process outsourcing (BPOs) and financial services.

Twenty-five percent of agricultural exports go to the U.S. Twenty percent of other Philippine exports also go to the U.S.

Another 44 percent of exports go to third markets (Japan, Hong Kong, South Korea, Malaysia, Thailand, Taiwan), which are intra-transnational corporations’ trade. These exports also end up in American market.

It follows that job losses in economic processing zones (EPZs) not only in electronics but also in garments can be expected.

What about the dollar remittances from our overseas Filipino workers (OFWs)? For the longest time, our OFWs keep our economy afloat. In 2007, Filipino migrant workers and immigrants sent remittances amounting to US$14.45 billion. The Bangko Sentral ng Pilipinas (BSP) predicted yearend remittances for 2008 to hit more than US$16 billion.

Unfortunately, our OFWs are also vulnerable to the global economic crisis.

Thirty-two percent of 8.2 million overseas Filipinos are in the US. At least 52 percent of remittances are from or via the US. Current unemployment rate in the US is 7.2 percent, the highest since 2006.

How many OFWs in the US have so far lost their jobs? The Philippine government does not divulge. It probably does not know.

Our OFWs in Taiwan were the first to be hit by the crisis. According to the Philippine Overseas Employment Agency (POEA), close to 400 OFWs have been retrenched from the export and manufacturing companies in Taiwan as of November last year.

An independent estimate by Migrante International reveals that as of December 5, the total number of OFWs who were laid off in Taiwan has already reached 1,401 from 24 companies.

Labor Minister Jennifer Wang of the Council for Labor Affairs of Taiwan announced that 3,000 more OFWs are expected to be retrenched by the end of 2008 and more than 11,000 more by this year.

How does the Arroyo government deal with the crisis?

Mrs. Arroyo announced the allocation of P330 billion for economic stimulus package. “The plan aims to upgrade infrastructure, expand social protection, and ensure sustainable growth in the midst of the global economic crisis,” she said.

However, the jobs to be created from the fund are short-term. Among these include hiring of more street sweepers, construction of village pharmacies, road maintenance projects, repair of hospitals, utility services for public schools, irrigation projects, etc.

Undeterred by retrenchments of OFWs, Mrs. Arroyo issued Administrative Order 247, instructing the POEA to identify countries that are “aggressively recruiting foreign workers and which are natural deployment sites for OFWs.”

The government’s intensification of the labor export policy is tantamount to admitting it cannot provide quality jobs for Filipinos here.

Social protection? The Arroyo government’s idea of social protection is almsgiving. Malacañang announced that the stimulus package will also cover a P10-billion subsidy to 640,000 poor families nationwide. The target beneficiaries comprise less than four percent of the country’s poor as the 2006 Family Income and Expenditures Survey reveal that 8.7 million families have income of less than P8,300 per month.

It’s another thing if such funds will ever reach the poor.

Moreover, the recently approved national budget is telling. The Arroyo government has allotted P252.55 billion for interest payments of debt. Compare this to the P158. 21 billion for education, P27.88 billion for health and P10.62 billion for social welfare and development.

Until now, Mrs. Arroyo and her managers refuse to admit the extent of the crisis. Doing so would unmask that there are no such things as “sound fundamentals” that make the country “resilient” from the crisis.

In reality, our export-oriented, import-dependent economy is ever in crisis. As long as we have leaders who only think of how they could steal more money from public coffers, as long as we remain tangled in foreign interests, as long as we do not develop our own agriculture and industries, we will never get rid of unemployment, poverty and hunger.

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