Editorial (Malaya Newspaper, January 26, 2009)

‘The approaching storm is more severe than it appeared last year.’Let’s stop kidding ourselves that the shutdown of the assembly testfacility of Intel in Cavite is an aberration that has only marginal impacton the overall employment situation. The loss of 1,800 jobs at the plantmay pale in arithmetical significance to the 1.5 million jobs Gloria Arroyoclaims her economic stimulus will generate this year. But the jobs Intelused to provide are qualitatively of a magnitude better in terms of incomethan digging ditches, sweeping streets or similar makeshift employment.These are the very jobs – paying higher than minimum wages with generousadditional cash and non-cash benefits - that are about to fall victims tothe global economic slowdown.

The Trade Union Congress of the Philippines earlier warned that in oneLaguna export processing zone, around 35,000 have already been affected bythe slowdown in foreign demand for electronic and automotive parts. Aroundhalf had been dismissed while the other half had to agree to a shorter workweek just so they could retain their jobs.We do not know where TUCP got its figures. But its estimate fits with otherprojections of a likely loss of 60,000 in the information technology alone.It should be kept in mind that the reverses of the electronic assembly andautomotive parts exporters were not immediate results of last year’sfinancial crisis. The drop in demand for their products was caused by theoverall economic slowdown which came in the wake of the credit cruncharising from the bankruptcies of banks.

The country may have emerged from the dramatic first shocks relativelyunscathed. There have been no bank failures, for example, despite theexposure of some financial institutions in the bankrupt Lehman Brothers.The effects of the economic slowdown, while less dramatic, may impact thelocal economy more broadly and more deeply.The electronics sector accounts for 70 percent of Philippine exports andemploys about half-a-million people. Where Intel goes, the rest are sure tofollow. Automotive parts makers form the next biggest sub-sector in theexport of manufactured products. Here is another industry headed for thesunset.

What remains? There’s the mining industry, another sector whichconsistently tracks the movement manufacturing sector of the developedeconomies. Then there are the agriculture products for exports which happento be tied to consumer demand.The conclusion is unavoidable. The approaching storm is more severe than itappeared last year. Let’s forget about the purported resiliency of thelocal economy and the claimed ability of government to pump-prime it.Let’s batten down the hatches and brace for the worst.?

Labor group identifies65 ‘vulnerable’ firms

THE Trade Union Congress of the Philippines yesterday identified 65 largecompanies it described as being "extremely vulnerable" to worker layoffsresulting from the global economic crisis.Most of the companies have already implemented some "changes" in theirworkforce, said TUCP secretary general Ernesto Herrera."Many of these firms have already begun laying-off workers, are about toretrench personnel, or have already asked their staff to report for work ona rotating basis, for shorter periods," said Herrera, former senator.These firms, he added, mostly belong to the industry of manufacturingsemiconductor devices and other electronics components; computers, computerperipheral equipment and accessories; TV and radio transmitters andreceivers; and sound or video recording or reproducing apparatus, andassociated goods.Herrera said majority of the companies are located in special economiczones.

The 65 "vulnerable" firms are:
1. Texas Instruments (Phils.) Inc., 2. NXP Semiconductors Philippines Inc., 3. Rohm Electronics Philippines Inc., 4. Intel Technology Philippines Inc., 5. Epson Imaging Devices (Phils.) Inc., 6. NXP Semiconductors Cabuyao Inc., 7. Samsung Electro-Mechanics Philippines Corp.,8. Ibiden Philippines Inc., 9. Sanyo Semiconductor Manufacturing Philippines Corp. 10. Shin Heung Electro Digital Inc., 11. San Technology Inc., 12. Analog Devices Gen.Trias Inc., 13. Ionics EMS Inc., 14. Nikko Materials Philippines Inc., 15. SIIX Logistics Philippines Inc., 16. Pricon Micro-Electronics Inc., 17. Dyna Image Corp. Philippines, 18. First Sumiden Circuits Inc., 19. Cypress Manufacturing Ltd., 20. Fujitsu Die-Tech Corp. of the Philippines, 21. Vishay (Phils.) Inc. 22. SB Flex Philippines Inc.; 23. Allegro Microsystems Philippines Inc., 24. Katolec Philippines Corp., 25. Fairchild Semiconductor (Phils.) Inc., 26. MD Tech Phils. Inc., 27. Fuji Electric Philippines Inc., 28. Daeduck Philippines Inc., 29. ON Semiconductor Philippines Inc., 30. Nanox Philippines Inc., 31. Sanyo Capacitor (Phils.) Corp., 32. Rohm Mechatech Philippines Inc., 33. P. Imes Corp., 34. NEC TOKIN Electronics (Phils.) Inc., 35. Tong Hsing Electronics Phils. Inc., 36. Poongsan Microtec Philippines Inc.; 37. AMI Semiconductor Philippines Inc., 38. ISPL (Phils.) Inc., 39. Orient Semiconductor Electronics Philippines Inc., 40. Yu Jin Optical Electronics Inc., 41. PerkinElmer Optoelectronics Philippines Inc., 42. Analog Devices (Phils.) Inc., 43. SMK Electronics (Phils.) Corp., 44. Toshiba Information Equipment (Phils.) Inc. 45. Panasonic Communications Philippines Corp.; 46. Fujitsu Computer Products Corp. of the Philippines, 47. Samsung Electronics Philippines Manufacturing Corp., 48. TDK Fujitsu Philippines Corp., 49 Hitachi Global Storage Technologies Philippines Corp., 50. Wistron Infocomm (Phils.) Corp., 51. Calamba Shinei Industry Philippines Corp.; 52. Hoya Glass Disk Philippines Inc., 53. Mistumi Philippines Inc., 54. Nidec Subic Philippines Corp.,55. Sanyo Denki Philippines Inc.;56. Shindengen Philippines Corp., 57. Aikawa Philippines Inc., 58. Trends and Technologies Inc., 59. Fujitsu Ten Corp. of the Philippines, 60. Panasonic Manufacturing Philippines Corp., 61. Sony Philippines Inc., 62. Sharp (Phils.) Corp., 63. Muramoto Audio-Visual Philippines Inc., 64. Clarion Manufacturing Corp. of the Philippines 65.Nippon Antenna (Phils.) Inc.

The TUCP asked the labor department to provide assistance not only todisplaced overseas Filipino workers but also to local employees who losttheir jobs.Assistance, according to Herrera, should include six months of emergencyunemployment loans from the Social Security System, extra child supportinsurance for those with at least one toddler, additional direct cashtransfers from DOLE and/or the Department of Social Welfare andDevelopment, preferential treatment of their children in the grant ofschool tuition subsidy or government scholarships and skills retooling programs to help them find new employment elsewhere.