IBON: Historic High Joblessness Should Be Addressed Beyond Token Measures

IBON Press statement / 1 May 2009

The situation of Filipino workers is seen to be at its worst today due to record high joblessness and widespread lay-offs amid the global crisis, and more radical reforms are needed beyond token government measures.

The average real employment rate of over 11% from 2001 up to the first quarter of 2009 is the worst in Philippine history and is seen to even worsen due to the crisis. Workers in the manufacturing sector are apparently the hardest hit, as the Philippine exports industry is more vulnerable due to its dependence on the US markets. Job losses seem most severe in this sector, which reduced 122,000 jobs from 2008 on top of the 137,000 manufacturing jobs already from the year before.

The severe jobs crisis in the country cannot be addressed squarely by the so-called Comprehensive Livelihood and Emergency Employment Program (CLEEP) of the Arroyo administration, which does not veer away from government’s approach in generating jobs. Part of the emergency package is still providing assistance of re-deployment to affected overseas Filipino workers (OFWs) and additional trainings for skills upgrading and retooling. Moreover, even if the program does create the projected 800,000 jobs this year, it still cannot absorb the more than 900,000 new labor force entrants, on top of the roughly 11,600 permanently retrenched and

38,800 temporarily laid off workers plus the 12,000 displaced OFWs since October 2008 when the global crisis imploded.

While government’s response is grossly inadequate, IBON moreover decries the efforts of government and big businesses to pass the burden of adjusting to the crisis on workers through wage and benefit cuts and layoffs. Under the administration’s Economic Resiliency Plan (ERP), the Department of Labor is insidiously pushing for flexible work schemes like rotated force leaves and shortened work shifts supposedly as a response to the global crisis.

In the face of inadequate solutions to address the crisis, the labor sector and the economy urgently need aggressive reforms and programs. Measures that would yield immediate benefits include increasing public spending for social services, removing the VAT on oil products, freeing public resources by discontinuing debt payments, among others.

Government should also be in the forefront of defending Filipinos’ jobs, which should involve implementing programs that will stop flexibility schemes and other work measures that threaten job security. Filipino producers should also be given a wide range of government support, including greater and cheaper access to financing, technology, raw materials and infrastructure. The domestic market can be oriented towards giving greater opportunities for Filipino industries even as foreign markets are actively sought. The government can also improve its procedures, tax benefits and other incentives for Filipino businesses.

Government’s elite-biased and free-market oriented policies, which have kept the Philippine economy backward, should be also be drastically reformed. At the minimum, there should be an overhaul of reckless trade

and investment liberalization policies that have worked against local industries and the welfare of Filipino workers. (end)

IBON Foundation, Inc. is an independent development institution established in 1978 that provides research, education, publications, information work and advocacy support on socioeconomic issues.