Palace holds summit to generate more jobs, preserve industries

The Department of Labor and Employment (DoLE) yesterday said Malacañang will hold a multi-sectoral summit today aimed at saving jobs by helping industries cope with the impact of the global economic crisis, DoLE Secretary Marianito Roque said.

Roque added the multi-sectoral summit on “Joining Hands Against The Global Crisis” was a priority of President Arroyo.

The summit comes at a time when global market analysts predict more job losses, company mergers and bankruptcies in the semiconductor industry, a major employer of Filipino skilled workers and the country’s export industry leader.

Traditionally the vanguard of the region’s exporters, Asia’s chipmakers are reeling from the impact of falling global demand. Thousands of industry employees are wondering whose job will go next.

Global sales of semiconductors fell 2.8 percent to $248.6 billion in 2008 from 2007, the first year-on-year drop in seven years, the US-based Semiconductor Industry Association (SIA) said this month.

In the Asia Pacific region, sales were down nearly 22 percent in Dec. 2008 from the same month in 2007, figures on the association’s Web site show.

“Weakening demand for the major drivers of semiconductor sales — including automotive products, personal computers, cell phones, and corporate information technology products resulted in a sharp drop in industry sales that affected nearly all product lines,” said SIA president George Scalise.

The trend is seen continuing this year, and Asia is expected to feel the economic impact more severely because much of the world’s production of electronic equipment is concentrated in the region, analysts said.

“For 2009, we do see the market being affected quite substantially,” Philip Koh, a vice president at market research firm Gartner, told Agence France Presse.

Japanese electronic giants have announced thousands of job cuts, and as demand for microchips softens, company earnings have plunged.

Taiwan Semiconductor Manufacturing Co, the world’s leading contract microchip maker, said last month that its net profit in the fourth quarter plunged 63.9 percent against the same period a year earlier.

Singapore-listed Chartered Semiconductor, another major global chipmaker, announced a fourth-quarter net loss of $114 million.

The industry should hit bottom this year, with a feeble recovery likely to begin in 2010, Koh said. However, this scenario will depend largely on global economic conditions in the first six months of 2009, he added.

“Of course if the situation gets worse over this quarter or into the next quarter, the recovery will be much slower,” he said.

Gartner forecasts global semiconductor sales to plunge by more than 20 percent this year from 2008, and the Asia Pacific region is likely to mirror that decline, Koh said.

Another market intelligence firm, IDC, expects worldwide semiconductor revenue to contract by an annual 22 percent to $192 billion this year.

Shane Rau, a research director at IDC, said that overall, the recession in the chip sector should bottom out in the first half followed by a gradual recovery later in the year, although some segments may take longer to rebound.

Companies that make memory chips are likely to be the first to seek mergers, Rau added.

“Qimonda in Germany and certain memory companies in Taiwan are in the throes of pending consolidation,” he said.

Qimonda, which declared bankruptcy in January, said this month it will close a US factory in Richmond, Virginia that employs 1,500 workers.

Struggling Japanese computer chipmaker Elpida Memory Inc has said it is in talks with chip companies in Taiwan to boost cooperation, while Japan’s Nikkei business daily reported last month that Toshiba and NEC Corp have been holding discussions on integrating semiconductor operations.

Matt Walker, an analyst with research firm Ovum, said consumer confidence is important for the industry’s rebound, while Gartner analyst Koh added that a recovery in the recession-hit US economy is key to lifting the battered chip sector.

“For spending at all levels to really rebound, there needs to be much more certainty and confidence than there is now,” Walker told AFP.

Koh added: “Ultimately… most of the region depends on the US market, whether it is China, Taiwan, Singapore or Malaysia.”

Filipina chip engineer Charmaine Decena and her family had always dreamed of buying their own apartment in Singapore, but they are now staring at the possibility of returning to their hometown in the northern Philippines.

The 35-year-old quality engineer for a semiconductor firm saw friends and colleagues fired in recent weeks as their company responded to the worst global economic crisis since the Great Depression of the 1930s.

Decena hopes the recovery comes sooner rather than later.

“There are also no jobs back home,” she said.

That this statement is a realistic assessment is reflected by the DoLE chief saying recently President Arroyo ordered his office and the Department of Trade and Industry to organize the summit following a recent multi-sectoral conference of labor, management and other stakeholders that also tackled measures aimed at mitigating the onslaught of the global crisis on local and overseas Filipino workers.

He added that the government is exhausting all means to preserve the workers’ jobs as this would sustain demand, which is essential in enabling industries cope with the crisis.

The labor secretary stressed that it is also necessary to ensure an environment that sustains and even allows business growth to enable the economy to preserve and also generate employment.

The multi-sectoral summit to be held at the Heroes Hall of Malacañang Palace will bring together top leaders of the business sector, labor groups, the religious, the academe and government and non-government organizations in a national effort to identify the necessary safety nets that would help vulnerable workers and industries ride out the current economic downturn.

Roque said about 200 summit participants will join hands in harmonizing government and private sector responses to the needs of workers and industries affected by the crisis.

The main objective, he said, is to enable industries survive the crisis’ adverse effects to preserve existing jobs and also generate employment for workers who have already been displaced.

Specifically, Roque said, the stakeholders will sign a joint communique affirming their commitments to support programs intended for jobs preservation and generation and also the provision of safety nets to workers and industries affected by the economic crunch.

The communique to be presented to the President would boost efforts to facilitate the re-employment and the provision of other forms of assistance to the displaced workers, he said.

Mina Diaz and AFP