Monday, June 04, 2007 Dole downplays job losses from stronger peso
LABOR and Employment 7 Director Elias Cayanong said retrenchment in some exporting firms, particularly in the furniture industry, is not unusual because their need for labor fluctuates depending on contracts.
“When the contract is met, it follows that they no longer need the people they hire on that basis, so they retrench. But when they receive another contract, they would again hire the same number of people,” he said.
But Jay Yuvallos, president of PhilExport, said his “conservative estimate” that 50,000 employees have either been retrenched or asked to work fewer hours recently refers to regular, not contractual, employees.
He attributed this to the continued strengthening of the peso against the US dollar, about which many exporters worry.
“I was not referring to seasonality. What I was talking about were the regular workers and we can’t keep them because we cannot keep operating at a loss,” he told Sun.Star Cebu in a mobile phone interview.
Robert Go, Philippine Chamber of Commerce and Industry (PCCI) governor for Visayas, agreed with Yuvallos but he refused to comment on the numbers.
Balance
“Importers, retailers and other sectors are gainers in this situation. This is what business is. In every situation there are losers and there are gainers. Karon ang mga exporters mao’y apektado (Now it’s the exporters who are affected),” he said.
Export firms would consider it a “fantastic performance” if they earn 10 percent profit, but since last year, the dollar’s value has dropped 13.3 percent relative to the peso.
“Any 10 percent profit just gets cancelled. The drop is now almost 14 percent and that is too high. If the government does not act, then we are eliminating our manufacturing sector and that is a very dark scenario,” Yuvallos said.
He also said the country is less competitive than its neighbors because of a higher cost of labor, power and doing business, plus red tape.
Cayanong, for his part, refused to comment on the businessmen’s warning that further depreciation of the dollar will result in the retrenchment of thousands.
“That remains to be seen. But currently there is no clamor yet from the labor front and I presume that those retrenched are those in pakyaw (sub-contracted) system not the regular employees,” he said. (AIV)
