Signs of the times

(This was written in 2007 yet but it still looks relevant today.)

THE signs are getting clearer. The looming economic crisis which seemed like a distant shadow last year has finally struck down its first casualty this year in the closure of the Intel plant in Gen. Trias, Cavite, causing more than 4,000 workers to become jobless. The news comes as a shock to us here who have so far viewed the crisis as something farfetched. This means more than 4,000 families will be a lot poorer, business will certainly suffer, and so will schools which could experience reduction in student population.

In the municipality where Intel has a plant, income will be lesser by at least P50 million a year, announced the mayor. And if Gen. Trias behaves like other municipalities where money is usually spent to hire political protégés, this means a good number of employees will be out of jobs, and services will be severely affected.

Now that’s just Intel. Think of other firms that supply Intel its raw materials and other services. Another semi-conductor firm operating in Baguio, Texas Instruments, earlie laid off 450 workers when it closed shop. In the other electronics sectors, we are told that workers from Samsung, Yazaki, F-Tech, Fujitsu, NEC, TDK, and Matsushita are facing lay-offs in the first quarter this year. In September 2008, Amkor wiped out all its 3,000 contractual women workers. These are Korean and Japanese firms.

Overall, more than 60,000 workers in this sector will be out of jobs. Now if this isn't depressing, I wonder what isn't.

What comes to mind at this point is the Export Processing Zone in Cebu, many of whose occupants are in one way or another related to the micro processing business, supplying other goods and services the way Intel does. Our news sources tell us two export companies in Lapu-Lapu City have started retrenching their workers due to the global economic slowdown. A furniture company in Mandaue City has declared a temporary closure, displacing over 300 workers.

Giardini del Sole Wooden Furniture Inc., which exported furniture to the US and Europe, filed a notice of closure with the Department of Labor and Employment in Central Visayas (DOLE-7) last December 17. The company finally closed its gates last Monday.

In the car industry sector, Toyota Motor Philippines implemented this month a Monday-no-production day and it announced to "temporarily" get rid of its 500 contractual workers and on-the-job trainees by March.Nissan Motors laid off 40 regular employees in December and plans to retrench an additional 70 more this 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 steps of its mother company, which displaced 30,000 Japanese employees.

In far away US of A, we also read that Microsoft, the giant software company that has created Windows and several other companion software, is also closing some of its operations, laying off some 5,000 workers. I expect other software companies will also downsize their working force if they want to weather this storm and come out intact.

Our economic planners and policy makers probably did not expect that this ‘globalization’ phenomenon would come to this. They always thought it was the best thing that could happen to us, so that even our own politicians never failed to include this in their agenda. Little did they suspect that the complex interrelatedness that globalization entails has its downside that would trouble us sooner or later. Unhappily, it has arrived sooner than everybody expected.

The question now is, how do we, in developing countries, surmount the crisis? Surely, there are jobs that will be severely affected, and these are especially in companies that cater to high end markets. (We read that Gap will be closing down some 100 stores and Starbucks 600 of its own because of the expected reduction in sales.) We can expect layoffs in this job market. But those in the health sector, like many of our nurses and physical therapists abroad, will continue to enjoy their high pay as their services will even increase with the entry of the baby boomers into the retirement zone. At least that’s what many economists predict.

To those of us living in the provinces where government is the major employer and very few are with the private sector, the crisis may not be that bad. But it will be sorely felt by those dependent on their relatives working abroad employed by firms affected by the crisis. However, being closer to the farms where food is more available and the lifestyle does not make too many demands, the crisis may be easier to bear, what with our capacity to suffer and make adjustments being almost legendary.

I fear that it is in large urban centers where the crisis can generate all sorts of negative impacts, like an increase in daylight robberies and holdups and the emergence of anti-social groups that will take advantage of the situation. I just hope a lot of our brothers and sisters will have enough sense to return to their roots in the provinces – just like what our forefathers did during the war.

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