The Government Knows…

…that hundreds are losing their jobs in our country everyday as the global economy slows. This is according to the Labor Secretary himself. From December 1 and January 19, some 15,600 workers were laid off, most of them were happening in the electronics sector, which has suffered from plunging global demand. He even estimated the number of jobs to be cut soon – around 60,000 from the electronics and garments industries.

But what are they doing about it? On the stimulus package bundled in the 2009 GAA (Gen. Approriations Act), the emphasis is on Infrastructure and replaced OFW. But what about replaced local jobs from the abovementioned industries? Convert them into infrastructure workers?

The problem with our government is that it is reactive more than proactive. They should have concrete plans to counter anticipated effects like this. Electronics Industry workers posses a specialized skill, and they will not be properly compensated if they switch industry. If We cannot attract other electornic firm to come here to do their operations, then it is best for these workers to go abroad. Otherwise, they will be counted as officially unemployed in 2009

Recession stories

It quietly slipped under our blankets while we are chilling on a December night. We were all lulled by the long break due to government proclaimed extended holidays. We tried to make the holidays simple to have enough reserves for the coming year. But then, it hit us. We thought we were prepared, but I think no one can prepare for this.

We were still having a holiday hang-over. the mood was still upbeat despite the load of work to be finished. We already heard stories of some export companies ceasing operations due to drop in orders, or no orders at all.

First over the hush-hush was Citibank. The latest is Accenture. In the news, Intel.

How would you like to do it? through a pink slip? The story of Citibank employees being handed over a pink slip – which is the last payment plus some benefit for you to leave the company.

Or through a pleasant vacation? The story of Accenture employees being asked to maximize their leave credits so that the company won’t have to pay for it, then will make you leave the office upon return before lunch time, along with your last pay plus some cash.

The government has been serious, but not serious enough to avert the situation. They are even saying that the BPO industry is strong despite these economic crisis. In a time when inflation is hitting double digits while the salary is not keeping up, loosing your job is the worst thing that could happen to you.

We will hear more stories in the coming days. Feel free to share it with me.

What To Do When Your Bank Folds

This is in relation to my previous post about banks folding up. Money Smarts came up with a guide for depositors of closed banks on what to do and where to go. Remember to manage your expectation as the process is usually long from scrutiny of eligible depositors to cash pay-out.

I read some posts in money smarts few years ago encouraging people to go into rural banks offering higher yields than usual. The justification usually is that this is covered by PDIC. I wonder where are those readers now.

Alternative View To Fuel Prices

Somebody’s brave enough to drive his point opposite a one way sentiment to fuel prices. Or maybe he took an alternative way to drive home his point. Mr. Deakin provided a simplistic yet reasonable solution to this whole fuel price cycle. With the way we are going, as we forget fuel conservation all together due to lowering fuel prices, it is not improbable that we will be surprised by a pump price increase tomorrow. We are feeling the major sign already – increase in traffic.

Here are the salient points of his opinion:

1) Slap another 100% tax on fuel, which at today’s rate would make it around 60 pesos a liter, or about the same as during the peak period earlier this year. The extra 30 pesos a liter would go directly to an exclusive road user’s fund that is completely transparent, and will be used to fix all of our roads.
2) Surplus cash from the road user’s tax could be used to build a decent mass transportation system and underground walkways similar to the ones used in Makati
3) Public transportation vehicles, and perhaps trucks not older than a certain year that deliver raw produce from farm to market, could enjoy subsidized fuel so as not to penalize the poor
4) The road user’s tax would only be putting a premium on the private user, and encouraging them to make more environmentally responsible driving decisions.

Find time to read Mr. James Deakin’s article, and somehow you will agree with him.

Personal Finance For 2009

2008 was a tough year for the Economy, and even tougher for Personal Finance. I stopped looking at my investments in Stocks, and continued to build-up cash reserves in liquid and less risky investment like government bonds and Time Deposits. While different people has its own unique “taste” in investment, here’s a guide from Inquirer and points to consider in re-assessing your investment position this year:

1) Examine your investment objective. Before you embark on the world of investments, it is important to determine your investment objective first, and you have to be very clear about this. DO not do anything drastic if your investment objective has not been met.

2) Determine time horizon. The question on when to withdraw investment is really up to you. If you are saving for college tuition fee of your kids then do not step out of the market, otherwise you might miss the comeback of market gains.

3) Examine ability to take risks. Not all individual has the same preferance for risk level. Make sure that your risk tolerance is being followed when you invest. However, risk is correlated to gains. The more you risk, the more you gain, or loose. Tolerate your risk wisely.

4) You are in control of your money and don’t blame anyone for your losses. Sure you may have consulted a financial advisor, but the decision to where to invest is solely up to you.

Crisis in the Church

I find this article very amusing. Even the Church is feeling the economic crunch. Now all aspect of our lives, including the spiritual aspect, is somehow affected by the global economic slowdown. And I thought this will be the last resort of Filipinos during this trying times – pray harder.

Apparently the number of church goers also rose during the previous month. It maybe attributed to the holiday season when Filipinos try to complete the dawn mass (simbang gabi) prior to Christmas day, but it cannot be ruled out that some are praying for an economic miracle, or to shield them from recession.