164 RP workers lose their jobs daily under 10 years of WTO

Original Publication Date: 
22 November, 2005

Workers face growing joblessness, job insecurity and worsening labor conditions under the country’s trade liberalization regime and membership to the World Trade Organization (WTO).

Says IBON senior researcher Sonny Africa, data from the labor department show that between 1995, when the country became a member of the WTO and 2004, 6 firms a day closed for “economic reasons,” displacing some 164 workers. Of these, 58 lost their jobs due to the closure of their firms while 106 were retrenched when their companies reduced their workforce.

Reasons named by the reporting companies included lack of market/slump in demand; competition from imports; and downsizing/reorganization.

These figures were echoed by a survey of the Federation of Philippine Industries (FPI) among its members, which showed that from 1995 to April 2001, 56 firms closed, displacing 80,319 workers while 29 firms were forced to downsize their workforce, resulting in 4,019 jobs lost. This means that during the first seven years of the country’s WTO membership, 32 FPI workers a day lost their jobs because of trade liberalization.

The FPI survey cited too rapid tariff reduction and competition from imports and smuggled goods as reasons for the closures and retrenchments.

Aside from massive retrenchment, trade liberalization has also resulted in the surge of contractual workers. Local firms, already bankrupt from tight foreign competition, maintain contractual workers to cut their costs. Aside from threatening workers’ job security, contractualization also denies them the right to organize to protect their rights and bargain collectively.

Trade liberalization also endangers what little industry the country has left. With the country totally opened to manufactured imports under the non-agricultural market access (NAMA) negotiations in the WTO, local industrialists may simply shift from manufacturing to trading, while others may just close down operations as many of them have already done.

IBON’s Africa urges government negotiators to reject further liberalization of the domestic economy at the upcoming WTO Hong Kong Ministerial.

Further, government should reverse trade liberalization by increasing tariffs to protect local industries and the agriculture sector against cheap imports and smuggled goods.

Genuine industrial development is impossible under the corporate-led globalization framework promoted by the WTO, says Africa.