The effect of the global financial crisis is expected to slam in the country like a big typhoon some says it would like be a tsunami. The so called economic storm started on some far away and riches land on earth but its force will be much more when it reaches Asia which includes Philippines. News can be read and seen anywhere regarding company lay-offs, force resignation to cut down manpower cost, and the worst, companies are closing down. Some says that the Philippines are far away from this financial crisis. But personally speaking I would say that this global financial storm’s effect is very much felt, not just by the basic income earners but as well as the high income earners. Recently, Intel Philippines has layoff around 2000 employees to cut down on production and labor cost. FedEx shut down its branch in the Philippines too and also a number of employees lose their jobs.
Base on national statistics, unemployment greatly increased in 2006 and 2008 is expected to be the worst year since the 1998 Asian economic crisis. Last year, 2008 also based on statistics, the labor force grew by 81,000 but the number of unemployed rose by 249,000. This simply means that least jobs are done while more jobs are getting abolished or people getting layoff.
Filipinos who are working abroad are also in the edge of losing their jobs abroad as the global crisis are hard hitting the countries were they are working. There are over a thousand who are working abroad that went back because the company they were employed shut down or they got layoff by their employer. The sad part is these workers were in debt just to get the needed requirements to get their jobs. Much more affected are their families, which are their obvious reason why they want to left the country and look for some good paying jobs to give their family and love ones a better future. But because of the crisis, they went back here, empty pocket, even in debt with less hope of better life for themselves and for the families as well.
With this financial situation, major banks are cutting down on loans and credits. Which means small business will not get the loan it needs to have an expansion and big companies may be force to cut down on their spending to maintain their operations and pay their debts. And its effect to the labor force would be less or no new jobs would be created and worse would be employees and laborers will eventually lose their jobs.
Most are asking and worried on how long would this financial storm will last and if we can survive. I think this depends on how dependent we are on other countries. OFW remittances for instance are one of our source and direct foreign investments. But if an OFW contract got terminated because their company has been laying-off, then there will be no remittance. The effect of this will also depend on what will be the plans of the local government on how we are going to face this crisis. Let’s just hope that whatever plan they have, it works.