Ustarez, however, thinks this is not what workers and OFWs rendered unemployed by the global financial crisis need to cope with the difficult times.
“Providing 100-percent subsidy for training programs which, as they say, are intended to improve the skills of workers and OFWs, is TESDA’s job,” Ustarez said. “But this is not what will serve the Philippines at this time. Workers and OFWs are losing their jobs left and right and there are no jobs being generated for those who were retrenched.”
Government data show that in the last two months alone, some 15,000 workers all over the country have been laid off as a result of the crisis, while 19,000 have been made to work for reduced working hours. The government estimates that anywhere from 300,000 to 800,000 more are in danger of losing their jobs this year.
It is not just the local-based workers who are taking the axe. Some 5,800 OFWs have been sent home in the last two months, government data further show.
To rescue itself from the effects of stock market overinflation, especially in IT (information technology)-related stocks (i.e., the “dot com bubble”), the US in 2001 blew the real estate and construction bubble. US financial institutions offered low interest rates for home mortgage loans: even those with low income or with virtually no collateral were encouraged to apply for home loans. Their loans, which became known as “subprime mortgages”, accumulated in US financial institutions starting 2001.
To spread the risk exposure of banks to these subprime mortgages, it underwent a process of “securitization”, in which home mortgage loan packages were combined with others, packaged and sold as bonds and securities called as collateralized debt obligations (CDOs). These were guaranteed in credit default swaps (CDS) by insurance companies such as AIG and sold to other banks, financial investment houses, and companies in the US that deal in speculative investments for its high returns.
However, beginning in the last quarter of 2006, borrowers – especially those with subprime mortgages – increasingly failed to pay their amortizations. This caused a ripple of effects on banks and financial investment houses holding both the mortgages and CDOs, as well as those which issued CDS. This led to a series of bankruptcies of banks and investment houses which had been previously touted as “too big to fail”.
The US credit crunch led to a global meltdown, with the US dominating the world economy. With its neocolonial ties to the US, the Philippines has proven to be particularly vulnerable to the effects of the crisis.
Ustarez said that what retrenched workers and OFWs need most at this point is temporary relief, which the government should provide. “The government should provide workers and OFWs with financial assistance, or subsidies, while they are jobless,” he said. (Bulatlat.com)