US high-tech firm to lay off Filipinos

BAGUIO: US high-tech components producer Moog Inc. will cut staff at its Philippines unit by almost 30 percent as it is hit by the global economic downturn, the local Labor office reported Tuesday.

Moog Controls Ltd. would lay off 293 of its 1,000 employees from July 1, its first retrenchment since starting operations in the northern city of Baguio 25 years ago, said Labor Department Assistant Director Sixto Rodriguez.

New York-based Moog makes components for both commercial and military aircraft, satellites and industrial and medical equipment.

Rodriguez said the department was making sure all those who were laid off receive the severance package promised by Moog, while other government agencies would provide other forms of assistance.

In December, Texas Instruments, one of the world’s biggest semiconductor manufacturers, announced it was laying off 400 of its 2,300 workforce in Baguio also because of the financial crisis.

Other electronics firms in the Philippines have announced layoffs, or put many employees on forced leave or half pay, as orders for semiconductors and other components dwindled because of a lack of demand.

Before the global meltdown kicked in toward the end of last year the Philippines electronics industry accounted for 70 percent of exports and employed more than 300,000 people.

In March, Philippine electronic exports, which accounted for about half of total exports, declined by 33.9 percent.

Boosting the economy

The government reported also on Tuesday that it would increase spending to boost the economy after posting a gross domestic product product (GDP) growth of just 0.4 percent in the first quarter. GDP is the total cost of all finals goods and services produced in a country in a year.

The figures come despite a government stimulus package worth P300 billion ($6.3 billion) announced for the first half of the year, which ministers said they would tap further over the second quarter.

“The government remains committed to increased and more effective public spending to help stimulate the economy,” said Finance Secretary Margarito Teves.

“In fact, government spending on infrastructure and capital outlays increased more than 60 percent, year-on-year as of the end of April,” he added without giving exact figures.

And socio-economic Secretary Ralph Recto said separately that GDP would have shrunk in the first quarter if it had not been for government spending. “If we did not carry out the economic resiliency plan, we would have had negative growth. But we could do better than 0.4 percent GDP growth.”

He added that the government expected heavier consumer spending to lift the economy in the rest of the year, estimating that people had stashed about P80 billion in banks in the first quarter as security against the downturn.

“We had a build-up of savings in the first quarter, which will eventually lead to consumption and investments,” he said.

Falling inflation and interest rates would also boost spending during the rest of the year, lifting the economy further, he added.

GDP growth in the first three months slowed from 2.9 percent in the final quarter of 2008, while officials had expected at least 1.8 percent. The government has forecast growth for the year of 3.1 percent to 4.1 percent.– AFP