DOLE: Nearly 2,000 businesses closed in 2006

Nearly 2,000 businesses in Metro Manila close down in 2006 despite the improving economy, according to the Department of Labor and Employment (DOLE).

Department officials attributed the closures mostly to financial difficulties and a poor market.

DOLE statistics showed that a total of 1,180 commercial firms in Metro Manila closed down and retrenched workers in the first half of 2006 alone due to economic reasons.

Esther Guirao, acting chief of National Wages and Productivity Commission, said of the total figure, only 181 opted to close shop while the rest laid off workers.

Guirao added that the closures and retrenchments threw over 17,500 workers out of work.

"Reasons cited for the closures and retrenchments were financial difficulty, high cost of raw materials and lack of market," Guirao pointed out.

Most of the businesses that closed down and laid off workers last year were in Metro Manila, she added.

Of the total 1,627 firms that closed down and retrenched workers, 72.2 per cent were from Metro Manila followed by Central Visayas, which only accounted for 11.1 percent

A total of 27,935 workers were displaced from January to June last year. Guirao said the figure could even reach the level of 2005 when a total of 57,800 were rendered jobless due to closures and retrenchments.

Guirao warned that the number of displaced workers could increase significantly this year if Congress passes the proposed P125 legislated wage bill.

Guirao explained that 99 percent of businesses in the country are small and medium enterprises that could not afford the wage increase. Small companies might have no choice but to retrench workers or close shop if the proposed measure is enacted into law.