MANILA – More Filipino workers will lose their jobs due to higher cost of electricity in the face of the worsening global economic and financial turmoil, the head of the country’s largest labor group warned.
Former senator Ernesto Herrera, the secretary general of the Trade Union Congress of the Philippines (TUCP), explained the higher power cost could force more companies, particularly export firms, to shut down operations or retrench workers.
“The upward adjustments in the rates of the state-owned National Power Corporation (Napocor) will definitely have the effect of an extra heavy tax on businesses and households,” Herrera stressed.
He pointed out that the rate increases are counter-productive and have the tremendous potential to inflate the cost of company operations as well as prices of basic consumer goods and services.
According to Herrera, it will even be more difficult for many companies to cope with the sudden fall in their export sales due to the global crisis and, as a result, will force them to cut some more of their labor costs.
Herrera added that the higher electricity rate would also weigh down on non-exporting firms already reeling from the decline on domestic consumer spending amid mounting job losses and the unusually harsh economic conditions the people are now facing.
The TUCP chief identified power-intensive industries as one of the major victims of such rate increases, which could eventually force them to either close down or resort to cost-saving measures like staggered work hours for their employees.
Among these industries, he said, are those engaged in construction, fertilizer, ceramics, aluminum, pulp and paper, glass as well as basic chemicals
In addition, Herrera said that among export-oriented industries, manufacturers of electronics and garments are extremely vulnerable to rate increases because they are also major users of electricity.
At the same time, retail trade will also suffer since large shopping malls, supermarkets and restaurants tend to consume a lot of electricity for air-conditioning, lighting and refrigeration, Herrera warned.
Even call centers and other business process outsourcing providers, he said, face risk of being adversely affected by the power rate hike since they operate day and night, seven days a week.
This developed as a TUCP spokesman announced they might defer plans to seek wage increases for minimum wage earners nationwide because of the global crisis.
The spokesman explained workers are expecting a package of financial relief and other benefits that is usually announced by Malacanang when the Philippines joins the worldwide observation of Labor Day on May 1.
“We are not abandoning the tradition of seeking a wage increase but we may delay it due to the ongoing financial and economic crunch that is buffeting the world,” the spokesman emphasized.
Instead, the spokesman said that on top of the TUCP agenda for Labor Day is for the national government to grant unemployment insurance or a monthly subsidy for workers displaced by the crisis.
These displaced workers need support, including financial assistance while they are looking for new sources of livelihood, he said.
Records from the Department of Labor and Employment showed that over 50,000 workers have lost their jobs due to the global crisis since October 2008.
Labor officials claimed that some of the workers were able to return to their old jobs but TUCP and other labor groups insisted that most of those displaced remain jobless.
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