Dubai’s debt crisis is affecting the Philippines as many Filipinos who work in the emirate and send lifeline of foreign exchange remittances to the country on a regular basis may lose bonuses, if not jobs. The crisis not only affects the overseas Filipinos who work in Dubai, as plans of those who looking for jobs there may be stalled for a while. This potential loss of jobs or job opportunities for Filipinos could dampen domestic spending as remittance activities might be affected by the crisis, according to analysts and economists.
While the immediate impact is in the form of escalating risk aversion in the financial markets, the sharpest blow could come from the potential loss of overseas Filipino jobs that, in turn, could curb remittance flows and dampen domestic consumer spending if the Dubai crisis worsens, analysts and economists said.
Dubai’s main investment arm, Dubai World, was seeking at least a six months delay on repaying its US$60 billion debt. Even if a United Arab Emirates minister insists that the impact will be small and that Dubai World will be able to pay its debts on time, confidence on the Middle East power has waned, even if for the time being. Emaar Properties has abandoned plans to expand in the UAE property market. Another sign that Dubai World is in need of fast cash is that it was content on selling its trendy Manhattan, New York hotel property W Hotel for just US$2 million.
Dubai World was a driving force in the property development and construction relies on thousands of foreign workers, many of whom are Filipinos. It’s understandable that the latest crisis in the Middle East will force the conglomerate to stop spending and cut costs. While this is widely understood that OFWs could lose bonuses and not jobs, the opportunity for job hunters don’t look promising. As Christmas holidays approach, the prospect of not receiving Christmas bonuses is a looming possibility.
Worries arose that Filipinos working in construction would be laid off due to the crisis that could impact other emirates where many Filipinos are also stationed.
“Many multi- and transnational companies are now implementing measures to lower operational costs and many are implementing salary reduction schemes. OFWs have no option but to agree to lower salaries rather than be sent home with no job at all,” according to the OFW group Migrante-UAE.
In case OFWs do lose their jobs in Dubai, Roque assured the government would be able to secure other employment for them in neighboring Gulf countries. “We still have between 60,000 and 70,000 unfilled job vacancies in Qatar alone,” Roque said.
On some companies, layoffs seem inevitable.
Julius Cainglet of the Federation of Free Workers said the layoffs in Dubai had already begun even in sectors deemed by the DOLE chief as safe for Pinoys. He shared that he has a friend in the IT sector laid off just six months after he arrived in Dubai.
Photo credit: CruisAir
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