MANILA (Apr 7) — Philippine labor groups are watching closely the job losses being reported in the United States, as any marked slowdown in the number of Americans being laid off could signal the beginning of the end of the global economic downturn.
“We are monitoring the number of Americans being thrown out of work every month. Once the job losses there have eased, this could be a positive signal for us here,” said former Senator Ernesto Herrera, secretary-general of the Trade Union Congress of the Philippines.
“While the Americans are losing their jobs, or fear losing their jobs, they won’t be consuming much. So our top exports, mainly electronics, auto parts and garments, are still declining,” Herrera pointed out.
“This is why many of our exporters, led by electronics firms, continue to lay off workers,” added Herrera, former chairman of the Senate committee on labor, employment and human resources development.
For now, Herrera said there are no signs yet of a nearing recovery. He said the widespread job destruction continues in America, which has the largest consumer-driven economy, and is also the Philippines’ single biggest export market.
On Friday, the US Department of Labor reported that 663,000 Americans lost their jobs in March, raising the US unemployment rate to 8.5 percent, the highest in 25 years.
“Many economists expect the US unemployment rate to soar to double-digit levels in the months ahead, so the worst may not be over yet,” Herrera said.
Citing National Statistics Office (NSO) figures, Herrera said the Philippines directly exported to the US a total of $8.2 billion worth of merchandise in 2008. This accounted for 17 percent of all Philippine exports last year, amounting to $49 billion.
“But we actually export a lot of goods to Japan, China and other countries that are then made part of products, such as electronics, that eventually get exported to the US. Because of this, we reckon that the US alone effectively consumes about 40 percent of all Philippine exports,” Herrera said.
“Just in the last four months, we lost some $4.707 billion (P226 billion at $1:P48) worth of exports compared to a year ago,” he added.
Philippine exports fell by 14.9 percent in October to $3.967 billion from $4.659 billion a year ago; by 11.9 percent in November to $3.494 billion from $3.964 billion; by 40.4 percent in December to $2.672 billion from $4.481 billion; and by 41 percent in January to $2.494 billion from $4.230 billion.
Herrera said he does not expect any real recovery here as long as exports continued to drop due to rising unemployment in the US and around the world.
The March job losses brought to 5.1 million the net total number of Americans laid off since the start of the US recession in December 2007. More than half or 2.65 million of them lost their jobs in the last four months alone.
A total of 681,000 Americans with non-farm jobs were laid off in December; 655,000 in January; and 651,000 in February.