By IBON Foundation
IBON Features— The global economic situation is expected to continue deteriorating until 2010 and even beyond, and the Philippines is going to be severely affected by the worsening crisis. Yet it is still possible to mitigate the effects on the country, and more importantly, to emerge from this period of crisis with a genuinely strengthening and forward-moving economy.
Various factors will come into fuller play by next year and action must be taken as soon as possible. The economy has been deteriorating steadily in recent years despite government hype and, as it is, growth has been slowing since the start of the year. The onset of global financial and economic turmoil however now pushes it into a deeper crisis that it is poorly equipped to deal with.
Economic distress
The slowdown that begun in 2008 and will carry through until next year is clear. Growth this year and next year could easily turn out the slowest in a decade. Joblessness will increase and add to the 4.1 million unemployed – estimated to include the jobless statistically removed from the labor force to lower officially reported figures – and 6.8 million underemployed as of 2007. The number of jobless and underemployed next year will very likely rise to well over 11-12 million.
Retrenchments and closures will be most immediately felt in the goods and services export sectors. Particularly affected will be the major sub sectors of electronics (67% of exports in 2007), apparel and clothing (5%), and furniture and woodcrafts (2%). The US in particular is the largest buyer of Philippine garments and furniture and receives 80% of total garments exports and 60% of total furniture exports. The crisis will weaken global demand for laptops, cameras and cellular phones which are the primary users of the semi-conductors and microprocessors that the country exports. As it is, the country’s export-oriented electronics sub sector employs some 500,000-600,000 workers. The US is also the world’s largest end-consumer of electronics.
The business process outsourcing (BPO) industry will also likely be badly affected with the US accounting for over two-thirds of foreign equity and 90% of BPO export revenue. The grand target of 940,000 BPO jobs by 2010 is even more impossible especially with employment at most at just 320,000 now. Similarly with local tourism and business travel outfits where hotels and restaurants will feel the pinch of less foreign and domestic visitors.
The jobs situation has clearly started to worsen in 2008. The number of jobless Filipinos drastically increased by 279,000 in October from the same period last year and increased the unemployment rate by 0.6 percentage points. Rough approximations correcting for the government’s recent maneuver of underestimating unemployment place the number of jobless Filipinos at around 4.3 million and the unemployment rate at over 11 percent.
The important manufacturing sector lost another 159,000 jobs from the year before, the transport, storage and communication sector lost 10,000 jobs, and financial intermediation lost 4,000 jobs. These trends are likely to continue until next year and be aggravated by deteriorating jobs in construction, finance and wholesale and retail trade. Small and medium enterprises in particular will have a harder time borrowing with creditors preferring perceived “safer” large borrowers.
Filipinos working overseas in distressed countries and sectors face layoffs or at least lower incomes. This is not just in the US where the crisis first erupted but also wherever in the world they might be and no country is untouched by the tumult. The US is notable though in that over half of all remittances– reaching 52% or US$7.6 B of US$14.5 B in 2007– come from the US or via US-based banks.
Philippines Vulnerable to Global Financial Crisis: Ibon
Philippines Will Survive Global Financial Crisis: Arroyo
Misuse of privatization earnings endangers Philippine economy, group warns
Reds seek activation of NPA hit squads in cities
After Ampatuan Massacre, 2009 a Record Year for Journalist Killings Worldwide
CHR to military: Respect and protect human rights during martial law in Maguindanao
Maguindanao, its political elite and a culture subservient to corruption
U.S. Must Improve Responsiveness to Mass Atrocities; Absent UN Action, Make Clear Willingness to Act on Its Own, Says New CFR Report
Martial law dilutes the Philippines’s human rights and democratic gains
Martial law in Maguindanao sets ‘most dangerous precedent’
Lawyers will wear black armbands, ribbons in courts
Law group shall file plunder cases against President Arroyo et al.
UN Experts: Maguindanao massacre must be the start of a major reform process
Arroyo’s oil-price control a publicity stunt, cries Ibon
Political Bloodbath Continues: Widow of Slain Activist Shot Dead
New Wave of Protests Against Charter Change Set in April
Comelec’s Automation to Worsen Election Fraud — Watchdog
2008: Another Bad Year for the Philippine Press
‘Unemployment Figures Wrong; Number of Jobless Higher’
‘Nicole Is Not the Enemy’
‘Nicole’: ‘My Conscience Bothers Me’
Is the Call Center Industry a Bright Spot for New Graduates?
6 Great Ways to Vent Your Frustrations
Eating Dirt Is Actually Good For Children
Australia Offers 150 Scholarship Slots for Philippines, Asia-Pacific
mamert dolera: The horrible maguindanao massacre displays the “crueltiest 221; act of political warlordism...
Don Untalan: I am also interested to buy (AROD) and the tall hybreed variety. Pls advice where to buy from Manila,...
scott: Sports and politics do not mix. But the economy of the Philippines relies on Pacqiao. How much money would a...
Bernadine Ebo: nov.11,2009 4:45 my husband and i wants to adopt