Global downturn weighs on OFWs

Like millions of Filipinos, Alma Ang left her homeland to work abroad for a salary far higher than she could have ever earned at home. Now, as the global financial crisis bites, Filipino migrant workers face the prospect of losing their jobs abroad and returning home unemployed and often in debt. In the case of Ang, after paying a recruitment agency 120,000 pesos (about $2,500) for a job at an electronics factory in Taiwan, she was retrenched within a year and is back in the Philippines without any work at all.

I wanted to earn more money so I could build a house for my family, but that did not happen," said Ang, 31, who gave up her job as a quality control officer at a garment factory near Manila for a job in Taiwan that paid four times her salary. As the global economic crisis deepens, countries such as the Philippines, which are heavily reliant on remittances sent home by migrant workers, face the prospect that workers may return en masse after losing jobs in recession-hit economies abroad.

Migrante International, an NGO that assists Filipino migrant workers around the world, predicts that 100,000 workers may lose their jobs this year. "We have yet to feel the full effects of the global economic crisis," Gary Martinez, head of Migrante International, told Reuters. "The situation will certainly worsen in the coming months".

A mass influx of returned, unemployed workers could weigh on the Philippines which has one of the highest unemployment rates in Southeast Asia and one of the highest poverty rates, with one-third of the population living below the poverty line. Mass unemployment and social problems that often accompany large-scale joblessness could also take a toll on what is expected to be a tight presidential election next year to replace President Gloria Macapagal Arroyo.

Working abroad has become a way of life in the Philippines. Millions leave every year to work overseas, mostly as domestic helpers, seafarers or caregivers, to support families back home. Last year, 1.4 million Filipinos moved abroad for work, a daily deployment of close to 4,000 people. Due to high unemployment at home, the Philippine government has long championed the exodus of workers abroad, despite widespread disquiet of a drain of talent.

Arroyo calls these migrant workers "modern day heroes" because the money they send home has kept the Philippine economy afloat even in times of economic uncertainty. But as the global economy faces its biggest downturn in decades with a slump in shipping and recessions in many of the countries that employ Filipino migrant workers, the Philippines may find itself particularly exposed.

Around 10 percent of the country's estimated 90 million population live abroad. Last year, they sent home a record $16.4 billion in remittances, a major pillar of the domestic economy. Economists expect the inflow of remittances to contract by as much as 6 percent this year due to the global slowdown. "There is declining demand for labor and that is going to reduce demand for migrant workers," said Steven Kapsos, an economist at the International Labour Organisation (ILO). "I don't think that that is a permanent phenomenon ... but it is difficult to look beyond this crisis," he added.

Cash sent home by Filipino migrants, the vast majority of whom live in the United States, is one of the Philippines' top sources of foreign exchange and a pillar of consumer spending in the domestic economy. A drop in remittances is expected to squeeze the Philippine economy as migrants' families tighten their belts, squeezing GDP, along with falling exports.

Returning migrant workers face a bleak future at home with the Philippine economy struggling to provide enough jobs. The unemployment rate climbed to 7.7 percent in January after some 40,000 workers were laid off in the past few months. The country's jobless population is now almost 3 million and over 1 million people enter the labor force every year.

Poverty is also a concern. More than 30 percent of the Philippine population live below a government-defined poverty line of $3 a day per family of five, and the number will likely worsen as more Filipinos are added to the list of unemployed. "The poverty rate has gone up while the economy was growing ... so with GDP growth slowing down to probably 2 or 3 percent this year, you can expect that poverty rate is going to increase further," said Ernesto Pernia, an economics professor at the University of the Philippines. "I would think the poverty rate would go up to something like 35 percent or 36 percent.

The government has formulated a 330 billion pesos ($6.9 billion) stimulus plan, to create almost one million jobs, including some 100,000 "green-collar jobs". About 250 million pesos will go to a support fund for retrenched overseas workers, while the government will also impart skills training for in-demand jobs in other parts of the world. Critics, however, say it is not yet clear how the government will fund the stimulus plan.

In the meantime, Filipino workers in places such as Hong Kong and Singapore worry about keeping their relatively high paying jobs. A maid can earn $500 a month, compared to just $120 at home, with most of the money sent home to provide for families. "Many of us here are feeling nervous because there's been a lot of jobs terminated because of the crisis," said Janette Pilotin, a 35-year-old Filipina maid in Hong Kong who uses her income to put her two children through school. "If I lose my job, I cannot afford to come back home," she said. - Reuters

The Power of Good Attitude

Nowadays, it’s somehow difficult to be retained in a company considering the global recession that has been shaking the world. But let me tell you an inspiring story shared by my colleague, Allan.

There’s a newly hired QC engineer in a certain department. Let’s call him “Noel”. Unfortunately, the company has started to terminate some people in the department to cut cost. He was more than a month working in the company when he was informed by his Director that he’s one of the unfortunate employees to be terminated.

Facing this kind of situation is very crucial to anyone. To any Overseas Filipino Contract Worker, the initial reaction would be to panic and get depress. Surprisingly, this new guy handled the situation objectively. He expressed his gratitude for being part of the company. He told the Director that he’s a family man with an expectant wife and thought that his work here in Kuwait would be their bread and butter. But still, he would respect whatever the decision of his superiors.

The HR department has prepared all the termination documents and the only signature left unsigned was from the Director. While waiting for his last day in the company, the company held a Sports Tournament. Would you believe that Noel still participated in this tournament and represented his department?

Little did he realize that he was being observed by his Director. He was greatly impressed with Noel’s positive spirit! That despite of his situation, he managed to show his professionalism and strong character. Then, the Director told Allan a very positive observation… “With what happened to Noel, he supposed not to play anymore for his department because his personal game (career) in the company will soon come to an end. So what’s the use? But still, he supported his department and played well, too.”

Coincidentally, Noel’s project manager (whose also aware of the termination) called the Director that same day. The project manager told the Director that it’s worth keeping Noel for the department considering his positive work habits and attitude. Finally, Noel has been recommended to stay in the company… that’s amazing!

Positive working attitude really pays off! So guys, keep up the right attitude despite of the negative things that may arise. Make the best of the bad situation and our reward is waiting like “Noel”.

Layoffs hit Kuwait financial sector

KUWAIT: Employees in Kuwait's financial sector are facing an uncertain future, with more layoffs and lower salaries expected as banks and investment firms try to weather the global financial meltdown. "They no longer recruit people anymore in the bank where I work," said a female employee at one of Kuwait's main banks. "Certain departments are being closed, and the employees are being shifted to other departments," she adds, explaining that tardy employees and employees who have received warnings are the ones with the most probability of being laid off. "But you never know," she says, adding that there is extreme fear among the staff nowadays.

The banking sector alone employs approximately 12,000 employees, a majority of which are Kuwaiti citizens. Thousands of expats and citizens work in the investment sector. Expatriates may bear the brunt of layoffs in the banking sector. But both citizens and expats in the investment sector face downsizing as the crisis deepens.

Already Kuwait's leading trade union has slammed private sector firms for layoffs and salary reductions. Reducing employees' salaries is against the private sector law, and shall be severely punished, said Khaled Al-Azmi, president of the Kuwait Trade Union Federation. "The problem stems from the greed of company owners," Azmi alleged in a statement to the press yesterday.

Already investment firms in Kuwait are laying off staff and restructuring salaries. Bonuses, raises and benefits have been canceled or reduced, according to industry insiders. More than half of Kuwait's 46 listed investment firms have seen their share prices halved since the crisis hit Kuwait in October. The bourse has nosedived, dropping from a high of 15.000 points in May to about 6.900 now.

Instead of diversifying their portfolios, investment companies invested all their assets in the Kuwait Stock Exchange. That's why when the market fell, their businesses fell with it," said one financial analyst in an attempt to explain why investment firms in Kuwait have taken such a sit.

Many investment firms will be forced to merge with other companies or face bankruptcy. About 70 percent of them can no longer meet requirements necessary for listing on the bourse, claimed the analyst who asked that his name be withheld. The fourth article in the KSE rules and conditions for listing shareholding companies states: "The company shall have achieved net profit in the last two fiscal years, and the yearly net profit shall not be less than 7.5 percent of the weighted average of the paid-up capit
al at the end of each fiscal year.

It also states that companies need a capital of KD 10 million to be registered. "The majority cannot guarantee to make the net profit of 7.5 percent in the next year in order to meet that requirement," elaborated the financial analyst.
Earlier this week, Parliament member Mohammad Al-Abduljader warned that 27,000 nationals employed in the private sector face termination. He demanded immediate government intervention to solve the problem.

Citizens made redundant can rely on government support but expatriates will be left empty handed, many of them forced to leave Kuwait if they cannot find another job within the 30 grace period after their work visas are cancelled.

The next hearing on the suit will be in early March.