A raise? Perish the thought!

Consider yourself lucky if you have a steady job in today’s economic environment. While one of my daughters was in the midst of enjoying her vacation here during the holidays, she got word her company back in California announced it would lay off a total of 1,000 employees or about 10 percent of the workforce. The layoff will be implemented this month but was announced just as the Christmas holiday season was about to begin.

It is tough in the US today, my daughter confirmed. They have one more reason other than the gray skies and the chill of the winter season to be depressed about this time of the year: fear for their jobs. Even before she left California for a holiday break here, my daughter said conversations turned somber on the topic of keeping their jobs in the light of the ever worsening news on the economic front. She was surprised to see the mood in Manila was plainly business as usual. She found our shopping malls a lot more cheerful and crowded.

But we shouldn’t fool ourselves. This is a global crisis and we are all in it together. In fact, even local businesses are starting to prepare to meet the challenges of the New Year by reviewing their spending plans. Many are getting into survival mode, no matter how reassuring Ate Glue and her economic managers are trying to be.

For instance, I came across a survey done by Watson Wyatt, an international consulting firm that deals with personnel matters on the mood of a select number of Philippine companies. They found out that 52 percent of these companies are decreasing their original salary budgets for 2009. The good news is, the decrease is projected to only be an average of 1.4 percent.

Given the Filipino’s natural tendency to be optimistic, Watson Wyatt found a majority of the companies optimistic of achieving moderate growth in key business measures in the short term. But a large number of employers consider rising manpower costs as a critical business challenge they are currently confronted with.

Indeed, employment is a top worry as we enter this new year. Labor Secretary Marianito Roque is fretting that the country’s unemployment level could hit a high of 10 percent this month if the economic crisis worsens. “The unemployment rate may increase from the current 6.8 percent to 7.8 percent, to even as high as 10 percent, if the pump-priming of western countries fails,” Roque was quoted by media to have said.

However, according to Roque, DOLE has yet to determine the number of local workers to be affected by the crisis. But he admitted that they have already observed slight increase in notices of retrenchment filed. Roque said the export industry which employs the largest number of workers, is going to be the worse hit.

The jobs situation has clearly started to worsen in 2008. The number of jobless Filipinos drastically increased by 279,000 in October from the same period in 2007 and increased the unemployment rate by 0.6 percentage points. The manufacturing sector lost another 159,000 jobs from 2007; the transport, storage and communication sector lost 10,000 jobs; and financial intermediation lost 4,000 jobs. In tourism, hotels and restaurants will feel the pinch of less foreign and domestic travelers.

These trends are likely to continue in 2009 and be aggravated by deteriorating jobs in construction, finance and wholesale and retail trade. Small and medium enterprises in particular will have a harder time borrowing as creditors tighten their lending criteria.

According to UP economics professor and former Budget Secretary Ben Diokno, “the challenge for the Philippine government in the days ahead is not having a balanced budget by 2010 or keeping the peso below the P50: $1 rate. Rather it is how to deal with 11 million Filipinos who are unemployed or underemployed.”

OFWs will probably save the day for us but even then, the influx of Filipinos securing jobs overseas does not result in lower unemployment rate in the country after all, a report from the Philippine Migration and Development Statistical Almanac showed. Despite the annual increases of the number of workers and emigrants departing overseas, and even after government data generators adopted a new definition of “employed” and “unemployed” that included overseas workers in 2005, the total number of unemployed Filipinos has remained at the 2.2-million level.

Filipinos working overseas in distressed countries and sectors face layoffs or at least lower incomes. Moody’s, the rating agency, says we vulnerable to a financial shock if cash remittances by masses of Filipinos working abroad decline due to a global recession. US is notable because over half of all remittances — reaching 52 percent, or $7.6 billion of $14.5 billion in 2007 — come from the US or via US-based banks.

More important, the economic crisis has badly hit the US, which also happens to be the largest buyer of Philippine garments and furniture and receives 80 percent of total garments exports and 60 percent of total furniture exports. The US is also the world’s largest end-consumer of electronics. As it is, the country’s export-oriented electronics subsector employs some 500,000 to 600,000 workers.

Thus, expect retrenchments and closures to be most immediately felt in the goods and services export sectors. Particularly affected will be the major subsectors of electronics (67 percent of exports in 2007), apparel and clothing (five percent), and furniture and woodcrafts (two percent). The crisis will weaken global demand for laptops, cameras and cellular phones, which are the primary users of the semi-conductors and microprocessors that the country exports.

No wonder eight in 10 Filipinos expect unemployment to rise next year because of the global financial crisis, according to a survey by an international research firm. The survey by Gallup International Voice of the People showed that in the Philippines — along with Hong Kong, Norway, Belgium, Austria, Greece, Ireland, Russia, China, Singapore, The Netherlands and Switzerland —around 80 percent of the respondents said they expect unemployment to get worse. Gallup surveyed 1,000 people nationwide in the Philippines, using face-to-face interviews between Nov. 3 and 23.

As I said, consider yourself lucky if you have a steady job these days. Don’t feel bad if your raise is not as substantial this year as in the past. Indeed, it may be better not to expect any raise at all. In the US, they are also adopting a misery sharing scheme wherein paychecks are cut so that the number of employees to be laid off is decreased or layoffs foregone completely. It is not far-fetched that such a scheme could be adopted here too if things do get really bad.

We simply have to count our blessings with each passing day.

Boracay

We got this e-mail from Manuel C. Diaz, a Pinoy geologist now living in the US.

For Boracay to be saved the government must act aggressively.

I was in Boracay in the early 70’s when it was not yet  spoiled by over development. Remember the puka shell fad? Puka shells were harvested offshore in Boracay.

The reason why the white beach stays cool is that the freshwater and the Boracay catch basin for rain water and salt water has reach equilibrium along the beach. The slow evaporation of the fresh water layer on top of the salt water makes the white beach sand cool.

This equilibrium has been upset by the imported piped water from the mainland. The solution should be that the piped water imported from the mainland should be piped back to the mainland and treated before being discharged. All waste water should be piped back into the mainland and not treated and discharged right there in Boracay. Solid waste should be ground and exported back to the mainland for processing and segregation.

The government should take over ownership of all of Boracay thru eminent domain and the development should be patterned after Yosemite National Park in California. There are no permanent residences in Yosemite National Park.

Unless these drastic measures are implemented, Boracay is doomed. It will be like Laguna de Bay in years to come… polluted and beyond redemption.

Poor rich

The Economist had some stats to show how the rich are suffering in this financial crisis. Over a third of American millionaire households said they lost at least 30 percent of their net worth since September, according to a new report by Spectrem Group, a financial consultancy. A majority of the wealthy say they may not be able to support their lifestyles and nearly 20 percent will delay retirement.

Boo hoo…

Wall Street disease

Max Ballesteros e-mailed this one from the US.

A retired New York resident who has moved to the West Coast to retire, visited a local doctor to seek medical advice for what he suspects as new and very unusual health problems.

Patient: “Doc, I feel shortness of breath, dizziness, cold sweats, can’t sleep. Do you think I will collapse any time soon?”

Doctor: “Yep. You must be from Wall Street!”

Boo Chanco’s e-mail address is [email protected]