Ecozone locators are starting to feel the pinch of high rates

With the global increase of inflation and the slowdown in the market, economic zone locators are now starting to feel the burden of high energy charges and labor costs. Senior manager Jeoffrey Escala of Celestica Philippines Inc. and president of the Human Resource Association (HRA) of the Mactan Export Processing Zone said in an interview that, majority of the locators within the export processing zones are burdened with the high rates of electricity as well as the increasing labor cost.

“Our electric power cost is very high compared to our other Asian neighbors such as Malaysia. Manpower also costs higher here and its impact to manufacturing companies like us is that it makes our operation cost higher which also in turn affects the prices of our products,” said Escala.

He added that if this certain situation will continue to worsen, companies may decide to transfer to other areas that offer lower production cost. 

Escala also said that aside from the increase in production cost, some of the companies inside the economic zones have been experiencing a reduction of orders brought about by the worldwide market slowdown and the global impact of soaring inflation.

He said that to harmonize this situation, some especially from the manufacturing companies implemented a shortened work week which was reduced to six days.

But Escala said that this do not affect all workers from the zone however he admitted that the move has reduced the take home fee of some employees.

And other than these economic burdens, most member companies of the Human Resource Association (HRA) are challenged with the rampant migration of skilled workers abroad.

Although he admitted that the sector cannot do anything to abate this problem, Escala said that the association is looking at the move to review the benefits that locators inside the zone are giving to their employees to also make sure that these employees receive competitive income and benefits provided by law.

To help employees cope with inflation, Escala said that some of the companies are giving out more privileges and incentives to its manpower.

In the case of their company, Celestica Philippines Inc., a Canada-based electronics manufacturing company engaged in the design and manufacture of high-end telecommunications equipment which operates in the Mactan Economic Processing Zone (MEPZ 1), Escala said that they are providing incentives and privileges such as meal subsidies, hospitalization benefits, and accident insurances for their employees to cope up with the impacts of inflation.

Currently, there are around 150 companies that are operating inside PEZA-registered economic zones such as the MEPZ1, MEPZ2, Light and Industrial Park, and West Industrial Park in Tsuneishi.

Among these companies, 70 percent are Japanese companies mostly engaged in industries such as manufacturing, electronic, semiconductors, and among others, said Escala. – Rhia de Pablo