Jinggoy wants barangay-based businesses to retrain and hire retrenched OFWs and other wokers

Senate President Pro Tempore Jinggoy Ejercito Estrada today urged the national government to implement a “barangay-based retraining and hiring program” for OFWs and other retrenched workers through which small village enterprises could retrain and/or hire those workers severely affected by the global recession, and enjoy special incentives in return.

“We have an extensive network of barangay-based enterprises which could provide to thousands of laid off OFWs and other severely affected workers their much-need retraining on current skills or for skills-shift, and even alternative employment,” Estrada, chair of the Senate Committee on Labor, Employment and Human Resources Development, and the Joint Congressional Oversight Committee on Labor and Employment, said.

He particularly cited businesses assisted by the national government through the Barangay Micro Business Enterprise (BMBE) Act of 2002 (Republic Act 9178).

The law has been supporting the formation and growth of small barangay-based enterprises with assets of less than P3 million that engage in production, processing and manufacturing of commodities including agro-processing, trading and services.

Businesses registered with the BMBE program enjoy exemption from income taxes and minimum wages rates, specially dedicated credit windows from financial institutions and guarantors, and pay only minimal taxes and fees. The program was initially provided with a P300-million special revolving fund.

Estrada noted the admission by the Department of Labor and Employment (DoLE) that thousands of OFWs had already been retrenched due to the crisis, and that the lay-off trend is on the rise.

Estrada said he was "alarmed" over the report made by the Trade Union Congress of the Philippines (TUCP) that at least 35,000 workers were retrenched from several factories exporting electronics and automotive parts at Laguna Technopark in Binan and Sta. Rosa, Laguna.

Last week, the National Statistics Office (NSO) had said that Philippine exports fell 11.9 percent to $3.49 billion in November, the second straight month of double-digit decline after contracting by 14.8 percent in October.

The country lost a total of $1.18 billion worth of exports from October to November 2008 compared to the same two-month period in 2007, according to the same NSO report.

The NSO report said the electronics sector -- the country's biggest exporter -- absorbed the bulk of the lost sales at $960 million over the two-month period.
Herrera attributed the rapid decline in electronics exports to massive job losses and tightening credit around the world, which in turn have dampened in a big way spending for automobiles, liquid crystal displays and high-definition TV sets, personal computers, mobile phones, MP3 players, iPods and other consumer durable goods.

Among the large electronics firms include F. Tech Philippines Manufacturing Inc., Fujitsu Die-Tech Corp. of the Philippines, Fujitsu Ten Corp. of the Philippines, Furukawa Electric Autoparts Philippines Inc., Futaba Corp. of the Philippines, Hitachi Computer Products (Asia) Corp., Matsushita (National Panasonic) Communication Industrial Corp., Matsushita (National Panasonic) Electric Philippines Corp., NEC Computer Storage Philippines Inc., Nidec Philippines Corp., TDK Philippines Corp. and Toshiba Information Equipment Philippines Inc.

“Barangay-based businesses, particularly those in the BMBE network, already form an operational and vibrant industry that has been keeping our economy afloat despite the global recession. The challenge to the national government now is how to maximize this system to help OFWs and other workers adversely affected by the global financial crisis so that they would immediately become economically productive again,” Estrada said.

According said that on top of those already provided for by the BMBE law, the national government should grant additional incentives to barangay-based enterprises that would participate in the retraining and hiring program for returning OFWs and other laid off workers.

Estrada also earlier proposed a special incentive package including tax credits, tax exemptions, income tax holidays and duty-free importation of raw materials and equipment for companies that would retrain and hire retrenched OFWs and other workers from local industries.