Another victim

The landline telephone business in the Philippines continues to buckle down under the extreme pressure brought about by competing technologies and declining revenues from international calls.

Following Philippine Long Distance Telephone Co.'s painful decision to let go of some of its regional telephone operators last Dec. 31 because less and less people are making operator-assisted calls, this time around, it is Ayala-owned Isla Communications which is retrenching over 70 employees starting late next month.

Islacom, a wholly-owned subsidiary of Globe Telecom and provider of Globelines landline telephone services in the Visayas, is embarking on a manpower reduction program in order to improve viability. Company officials said Islacom decided to retrench 75 workers from the wireline division, all of who are based in the Visayas with 50 coming from Cebu.

As of September 2002, Islacom posted losses of over P2 billion. The measure is expected to prevent further losses that continue to weigh down on the company's business and financial viability.

Officials added that aside from having sizeable capital expenditure and operating expenses, Islacom has an oversupply of people within.

As a result of the reduction program, the company expects to achieve greater operating efficiency and consequently, continued viability and service to the public, service quality, and shareholder value.

Islacom would be paying the affected employees with a generous separation package. While the law requires a company to pay a retrenched employee one-half of the monthly salary for every year of service, in the case of Islacom, it is paying 200 percent.

Islacom's current retrenchment is the third reduction of employees since the Ayala group bought into the then debt-ridden Islacom two years ago.

The way to go

Investing in people makes a lot sense especially when all signs point to a dismal global economic growth if any.

The World Bank has already lowered its global growth forecast this year from 3.6 percent to 2.5 percent. The Asian Development Bank shared a similar view, as it reduced its growth expectations for the region from 5.7 percent to 5.6 percent.

The Philippines has about 1.03 million overseas workers, of which around one-third or roughly 346,000 are laborers and unskilled workers. Only 17 percent of these laborers work as plant and machine operators and assemblers, although this latter group are the ones sending home a large share (P8.5 billion) of total remittances.

In order to maximize the earnings potential of unskilled workers, it is therefore imperative for government to step up skills training and retraining programs as foreign companies retool or shift to newer production technologies.

The Technical Skills and Development Authority or TESDA is the lead government agency in this task of churning out world-class workers.

In its year-end report, TESDA, headed by Dante Liban, has also identified its priority thrusts for 2002. These include the conduct of the first national education congress as well as the first national technical education and training summit, the sending of assessment and certification study missions in countries where demand for skilled Filipino workers is high, enhancing the system for assessment and certification for overseas-bound workers, ensuring quality of technical education and training through a comprehensive audit of public and private technical schools, stronger partnerships with LGUs, NGOs, the business sector and other partners, among others.

According to Liban, TESDA's end-goal is to maximize the contribution of technical education and training in poverty alleviation on the recognition that technical education has a significant role in empowering the poor and in economic development, that it is a tool for capacity-building, and that it provides the poor access and equity to economic opportunities.

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