Contrary to popular belief and what most of the media is feeding to the world citizenry, the global economic (financial) crisis did not come as a sudden phenomenon, plaguing most, if not all, countries in the world. world today.
The advent of the global financial crisis began in the late 1990s until the early years of the new millennium. With the recent shift to a more credit card-driven shopping marketing system and advances in Internet protocols resulting in the increased viability and practicality of e-commerce and the increased use of credit cards, consumerism has up several levels even to the point that an individual reaches a particular point where they are so in debt that they can no longer pay their debt on time. There may be guarantees in credit and pre-need services, but that may not be enough for the millions, even billions and possibly even trillions of outsourced funds to support consumer spending and extravagant lifestyles.
Such a scenario registered and continues to present an alarming difference between the rate at which funds are subcontracted from banks and other lending and pre-need institutions, such as mortgages, memorial plans and the like, and the respective returns on investment. This creates a stagnation in the economy in the sense that the aforementioned entities are no longer able to finance the demands of their clients as their funds are slowly depleted due to the wide gap between outsourcing of funds and return on investment. In effect, an economic recession ensues, as the money or capital that is supposed to circulate in the market is left in the hands of the banks and financial institutions or their myriad clients, many of whom have not yet paid the credits owed to them. credit or pre-need institutions to which they are attached.
The global financial crisis and the light of the Filipino worker
Although it may not be easily seen or felt at home, the global financial crisis is slowly choking the country’s economy as many Overseas Filipino Workers (OFWs), who are easily the largest contributors to the oil reserves, foreign currency and dollars through their remittances, are laid off and find it difficult to seek employment elsewhere. They are then forced to return to their homeland and join the ranks of the millions of unemployed Filipinos or look for other jobs that are most of the time not in line with their training and skills.
How did this happen?
The points illustrated in the perspective or overview regarding the global financial crisis can and will explain most, if not all, of the events that preceded it, which basically stem from an economy driven by credit cards, outsourcing of funds or stock Exchange. Filipino immigrants and overseas workers are affected because the companies or firms in which they are employed cut costs and therefore lay off some of the “not-so-important” helpers, “they can do with fewer members “part of the production line, reducing work hours to the basic minimum or even closing certain days of the week or worse, they declare bankruptcy and choose to close the store entirely. These companies then go and invest their capital in other places where labor is cheaper, such as China and its people. Today many companies flock to China because labor is relatively cheaper and the market is much bigger. After all, it is the country with the largest population, which only means a larger market and then again a higher return on investment and the flourishing of the company, for further development and expansion later.
Since our country specifically, our labor force is highly dependent on other countries for investment relative to employment, we are subject to the business tactics of large foreign companies and even small and medium foreign investors and are at the mercy of our employers either choose to lay off some workers, reduce work hours, or close shop entirely and invest their capital in countries with less worker compensation and all the bells and whistles that go with it. The main examples of such events that have occurred in the country recently are those of FedEx and Intel. The former, a provider of door-to-door delivery and logistics solutions, closed and moved to China and elsewhere, while the latter closed one of its plants in Cavite, laying off between 5,000 and 10,000 or 20,000.
In addition, the Philippine Export Zone Authority plant located in some parts of the archipelago and especially in Baguio City, where various companies engaged in semiconductor production and assembly, has considerably laid off several hundred or thousands of workers. workers or reduced working hours. Moog, for example, no longer allows its workforce to have overtime. The measure was implemented in order to maintain the workforce (ie, no one is laid off) while significantly reducing costs. Meanwhile, Texas Instruments has laid off several thousand workers instead of cutting costs and improving capital and human resource management.
In foreign countries, companies, especially pre-need companies engaged in outsourcing of funds, mortgages, housing and the like, even those investing in construction, engineering, research and many more, have laid off a significant percentage of the workforce. (which includes Filipinos, of course), reduced working hours or filed for bankruptcy and closed the shop entirely. Such was the case of AIG (American International Group, Inc.), which according to the 2008 Forbes Global 2000 list, was the 18th largest public company in the world.[1] and Layman Brothers Holdings Inc. in the United States that have filed for bankruptcy or bailout.
Furthermore, the repercussions of the global financial crisis can be seen even more at the household base level. How is this?
The effects of such a phenomenon filter from the paradigm of large corporations and investment or pre-need companies in any field of activity, from those that serve as employers to their employees, constituents and beneficiaries. The dismissal of workers, the reduction of working hours, the request for bailout and the bankruptcy and closure of companies mainly affect the regular base employees of private and state institutions, since their jobs are the ones that are in Game.
In the long run, all these events can and will result in inflation in the sense that there will be fewer and fewer producers of goods and services in the country; the smaller the producers, the smaller the product to be produced or the greater the pressure exerted on the production of the same amount or quantity of final product, which will increase the cost of production and the margin in the process under the law of supply and demand. This will increase the dependence of the population on imported products, since they are cheaper. Case in point: China.
Chinese products have been booming in recent years. As the joke goes: “God made the world. Everything else is made in China.” Jokes aside, there is truth to the statement. In almost every facet or field of the local and global economy, China is present, from the textile industry to construction, information and communication technology (particularly China phones and devices), the allocation and outsourcing of human resources and even the production of weapons and the improvement of military personnel and the arsenal. and development, ironically if comically, even her underwear has its own made-in-China version.
The “awakening” of the so-called sleeping giant has woven its effect into the economic fiber and the life of the global community. China’s cheap production and labor supplies have caused other countries to intensify their production process and human resource management to keep pace, be price competitive, and not be left out of the market. The Chinese world economic community is the subcontractor for some of the cheapest labor and production staff in the world.
Compared to other nations, the “Chinese economic boom” also affects the economy of the Filipino people. Our workforce or human resource may be one of the best equipped or at least knowledgeable in various disciplines and competitive, but the cost of your labor and the overall production process in our country is generally higher than in China. since we have a relatively exorbitant tax compared to the latter, which gives them an advantage over our products (since theirs is cheaper), although ours may be of equal or better quality and durability than theirs.
[1]Wikipedia, the free encyclopedia. American International Group. http://en.wikipedia.org/wiki/American_International_Group (accessed March 24, 2009)
The response of the Philippine government
Various governments approach the crisis differently. However, pump-priming, bailout or economic stimulus funds are the common denominator in all of them. Governments are geared towards helping, bailing out companies, especially those that employ a large amount of labour, so that they continue to operate and help not only in employment, but even more so in production and economic progress in general. President Arroyo, for her part, signed into law a bomb preparation budget of P1,414 on March 13, 2009. The law, Republic Law 9524, is P188 billion higher than the budget of P1,226 trillion from the previous year according to the Secretary of the Budget Rolando Andaya Jr.[1] He also said the increase was meant to boost the economy in the face of the global economic crisis.[2]
The Department of Education received the largest allocation of P158.2 billion, followed by the Department of Public Works with P130 billion.[3] The Department of the Interior, which includes the National Police, received P63 billion.[4]
The other main beneficiaries were the Department of Defense (P56.5 billion), the Department of Agriculture (P41.2 billion), the Department of Health (P27.9 billion), the Department of Transportation (P25 billion), the Department of Agrarian Reform (P13.100 million) and the Judiciary (P12.6 billion).[5]
Conclusion and Evaluation
The global economic (financial) crisis is nothing more than a sequel to man’s greed and longing for riches and more and more money. Most of it comes from the credit and pre-need businesses of the companies and the millions of plan holders they serve, which is geared toward consuming goods in the quickest time possible, even though the advance of consumerism . Pre-need plans and funds are outsourced to make goods and services readily available to participating entities, often without regard to the repercussions mentioned in the discussion above (the ripple effect of unpaid debt of thousands and even million subscribers).
We owe it to ourselves to get out of this fight we got ourselves into. We contribute to the problem and we ourselves have the solution. A shift in attitude from the consumer mindset orientation towards smart spending and sensible thinking surely won’t hurt.
[2] Joyce P. Panares. Arroyo signs the P1.4-T pump priming budget. http://www.manilastandardtoday.com/?page=joycePanares_mar14_2009/ (Accessed March 24, 2009).
[3] Ibid.
[4] Ibid.
[5] Ibid.
[6] Ibid.