Unemployment Protection in the Philippines

This paper asserts that unemployment protection should receive greater
attention from policymakers in the face of the unfolding
vulnerabilities of globalization. To substantiate such assertion, the
paper discusses the need for unemployment protection, analyzes the
existing unemployment protection mechanisms, identifies protection gaps
and proposes doable measures in addressing the gaps by refining
relevant social legislation.

Unemployment protection, which we define here as the mechanisms
intended to protect private sector labor from loss of income resulting
from loss of employment, should receive greater attention from
policymakers in the face of the unfolding vulnerabilities of
globalization. Even as greater integration of the Philippines to the
global economy has presented new opportunities for Philippine labor,
recent events have
also demonstrated its downside.

The 1997 Asian financial crisis, concededly a globalization phenomenon,
is a case in point. Its grave effect on employment is undeniable. In
1998, as the full impact of the crisis set in, the workers terminated,
temporarily laid-off, or placed on job rotation due to economic reasons
increased by almost 150 percent. A total 642 firms (up from 338 in
1997) reported closure, while 2,310 firms (up from 804 in 1997)
reported retrenchments.

These resulted in the termination of 76,726 workers (up from 39,176 in
1997) and the temporary lay-off of 50,744 workers (up from 19,843 in
1997). With the global economic slowdown expected to worsen as the full
effects of the September 11 attack on the World Trade Center in New
York set in, Philippine labor will again reel from a massive lay-off in
2002. Considerable employment reduction will be felt in export-oriented
firms such as electronics and garments as world demand slips.

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