Arroyo: Lifeline, incentives for jobless

Published by rudy Date posted on March 27, 2009

MANILA, Philippines—President Gloria Macapagal-Arroyo has announced an incentive for workers who lost their jobs in the electronics industry.

Ms Arroyo said some firms had agreed to continue paying at least half of the minimum wage of their displaced workers to help see them through the crisis.

“They know [the] electronics [industry] will come back. They don’t want to lose their workers. They’d like to keep them on their payroll if they can, even if they’re not really working,” she told reporters in San Juan, Batangas on Wednesday.

Ms Arroyo said “the idea is to pay them half of the minimum wage while they are training.”

For workers in general who lost their jobs, they may get a lifeline should a proposal of Socioeconomic Planning Secretary Ralph G. Recto be adopted.

Recto is seeking a monthly unemployment insurance of P10,000 for each laid-off worker. To cover 100,000 workers for six months, P6 billion may be needed, he said.

Up to 200,000 Filipino workers, many of them in the electronics and garments industries, could lose their jobs in the first six months of the year because of the huge drop in demand for Philippine exports, Labor Secretary Marianito Roque had predicted.

Exports in January fell 40.6 percent, while imports plunged 34.5 percent, as the global economic slump worsened. Exports and imports have been declining since October last year.

The International Monetary Fund expects the global economy to shrink this year, the first since the Second World War.

Skills training

Ms Arroyo said the government would come in the training phase courtesy of the Technical Education and Skills Development Authority (TESDA).

She said TESDA would offer scholarships so beneficiaries would be “more skilled when the market comes back.”

Ms Arroyo said she was looking to keep the government-private sector partnership for at least six months, the average duration of the emergency employment her administration was offering.

Trade Secretary Peter Favila said electronics firms would also continue giving their displaced workers “all sorts of benefits” on top of the separation pay the employees had received.

Residency status

Favila said the strategy of giving out continuous benefits was intended to keep the workers’ “residency” status, a key element in the computation of their retirement pay.

“The arrangement is that once there’s an upswing [in the industry],” he told reporters, “they will rehire [the displaced workers].”

Of the 45,900 workers who lost their jobs as of February, 31,000 were from companies based in Laguna province, according to Favila.

The number of workers laid off since October rose to 50,000 workers as of March 10, Recto said, citing data from the Department of Labor and Employment. Some 6,500 overseas Filipino workers also lost their jobs during the period.

Forced leave

Recto said there were also some 60,000 who had less work due to compressed work weeks, job rotation and forced leaves.

“That should be the focus because if we solve Laguna, we would have solved a great deal already,” Ms Arroyo said. “[The situation] will rebound, but when? We don’t want to wait for the rebound. We have to speed it up,” she said.

Ms Arroyo said the job losses had tapered off based on the assessment of Labor Secretary Roque.

Names, addresses

The President noted that the government had the names and addresses of the displaced workers, allowing it to easily track them down and give them jobs here or abroad.

“It’s a very finite number unlike those reported in other countries,” she said. “So we can really take care of each one of them. That’s my instruction.”

Funds from SSS

Recto said the insurance fund would be available to members of the Social Security System (SSS), who have been working and contributing to the agency for two years and recently lost his or her job.

“This is not a loan and it will not affect the retirement benefits that the individual will get later on,” he said. “The insurance may enable the worker to find a new job.”

Recto said the Calabarzon area, the country’s export powerhouse, should be given special attention because most of the laid off workers were from companies in the region composed of the provinces of Cavite, Laguna, Batangas, Rizal and Quezon.

Amend social security law

SSS president Romulo Neri said the social security law lacked provisions for unemployment benefits.

Recto’s proposal to provide unemployment insurance to workers would require amending the Social Security Act of 1997, Neri said.

“The contributions SSS collects at present only cover maternity, sickness, disability, retirement, death and funeral benefits of members and their beneficiaries, as provided by law,” he said in a statement.

Neri said the government must specify how unemployment benefits of SSS members would be funded.

“This may be from government subsidies, like what developed countries do to support their unemployed workers, or by increasing contribution payments of members to cover the additional benefit,” he said.

Jobs from tourism

Government is also looking at tourism to generate jobs in the country.

The President indicated that the government was banking not only on tourism but also on the BPO (business process outsourcing) to bail out the workers displaced by the global downturn.

“I don’t know how much tourism will grow but definitely the arrivals to the tourist destinations are up and BPO, the signs of growth are really unmistakable,” she said at a beach resort in San Juan, Batangas on Wednesday.

Ms Arroyo told reporters that several hotels and resorts would open across the country this year beginning this summer when huge crowds hie off to beaches.

She said The Banyan Tree Holdings Ltd., which is spending $240 million to construct three resorts in Coron, Palawan, between 2010 and 2012, was among the biggest investors.

Some 2,000 hotel rooms would be opened in Boracay, Bohol, Cebu and Metro Manila this year, providing 8,000 jobs, according to Tourism Secretary Ace Durano.

Recovery in second half

As global demand picks up, Philippine exports may recover in the second half of the year, which could limit job losses to half the 200,000 expected earlier, a senior government official said.

Spending by politicians ahead of the 2010 presidential elections would also boost the economy this year, and help the government meet its economic growth target of 3.7-4.4 percent, said Dennis Arroyo, director for policy planning at the National Economic and Development Authority. –Christian V. Esguerra, Ronnel Domingo
with reports from TJ Burgonio and Reuters

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