The ill effects of the global crisis did not exempt the Philippine economy. According to the documentary, in garments alone, 7,303 laborers lost their jobs. Peninsula Fashion in particular had 60% reduction in orders from USA thus; they needed to cut to half their labor force, from 1,000 to 500 sewers. Many of their clients went to Vietnam and Cambodia because of cheaper labor pay. Coconut exports to USA, Europe and Asia Pacific went down from $US717 to $US610. Nineteen (19) companies in the Cavite Economic Zone shut down their operations, which affected almost 2,000 employees. Fujitsu Company Philippines dismissed 1,700 employees while four thousand one hundred and ninety seven (4,197) Filipino factory workers in Taiwan had lost their jobs.
Insurance companies also absorbed a large impact from the global economic mishap. Philam Life Plans, a subsidiary of AIG was sold late last year. Prudential Life Plans and Permanent Plans were the latest injured companies.
However, experts believe that the Philippines is least affected by the crisis. The most that we could expect is an economic slow down but economists still project a 2%–4% economic growth in 2009. Although some ask, “Is the Philippines one of the least affected by the global crisis because of its strong economic fundamentals or just because it is not predominantly involved in the chain?”
According to Professor Winnie Monsod, the standard medicine for the financial crisis is a “stimuli package” that the government would put into the different affected sectors. The idea is to restore confidence in the market.
The Philippine government admits its need to achieve a better tax collection this year. Presently, the government relies on Overseas Foreign Workers remittances that have reached $US14B in 2007 and have gone up to $US16B last year 2008 and proceeds from the Expanded Value Added Tax. The Social Security System has provided the P250M support fund as a loan to the government.
For the average Filipino wage earner, life has been financially difficult these recent years and the global financial crisis aggravated his misery. The challenge is to survive the crisis like walking through fire and come out unscathed.
The documentary “Walang Pera,” featured an OFW who lost her job in Italy. When she came home, she ventured in a franchising business in a mall. Now, she’s doing well. However, there were cases that exposed troubling condition among low-income laborers. Since they could not find new jobs, some ventured into small retail businesses like selling eggs but their earning were not enough to survive. From the P10,000 they earned as laborers, they had to settle with P500 a week.
One doesn’t need a global financial crisis to get into financial trouble. The challenge of the global crisis is how one can come up with a good personal financial management plan that could give him the luxury of financial independence and at the same time could provide a sort of personal stimulus package for any future economic slump that could be way beyond his control.
References:
- GMA-7 News & Public Affairs Documentary, “Walang Pera” March 22, 2009 GMA-7
