Flag carrier PAL, stumbling amid Southeast Asia's economic crisis, has twice in a row delayed pay to its 14,000 workers.

"We can't tell our children to forego eating until Tuesday because our salary did not come on time. We can't tell the power company not to disconnect our electricity, because we still don't have money to pay our bills," PAL ramp supervisor Bong Palad complained.

For many workers at PAL, and at companies across the country, the anxiety is not whether the next paycheck will come on time, but whether the next paycheck will come at all.

PAL in February announced a massive retrenchment plan to keep the airline from buckling under a mountain of debt.

"The only time the management talked to the employees was to tell us that we're going to be retrenched...Imagine how we feel, our morale is very low," Palad said.

Low moraleand job insecurity are spreading across the country as managers try to cope with the sudden drop in economic growth which has slashed their company profit hopes.

And workers who used to be the booming companies' treasured assets have suddenly become unwanted liabilities.

More than 20,000 Filipino workers were laid off in January and February as companies slowed down production due to rising costs and lower demand.

"The number will grow tremendously as the crisis deepens," said secretary general Manny Sarmiento of the leftist labour group Kilusang Mayo UNO (May First Movement).

The economic turmoil spread across the region in mid-1997, knocking financial markets flat and prompting the international community to dish out more than $100 billion in emergency funds for the worst-hit countries.

In the Philippines, high interest rates and a depreciated peso have hit several firms, especially those which borrowed heavily prior to the crisis hoping to expand their businesses.

Since the crisis struck, morethan 20 firms have asked for protection from their creditors.

But the corporate failures have not stopped organised workers demanding higher pay to offset the rising food prices. Inflation hit an 18-month high in February.

"There's a dilemma right now. Are workers going to fight for higher wage or job security? These are the competing issues. We at the central office are trying to find the right balance," Sarmiento said.

"The biggest challenge for us today -- among unions, management and the department of labour and employment -- is how do we save jobs," said dean Rene Ofreneo, at the University of the Philippines' School of Labour and Industrial Relations, though he added that retrenchment was inevitable.

"If we can't prevent job retrenchment, the problem here is how do you ease the pain of separation?"

Ofreneo warned companies that they should not rush into arbitrary retrenchment.

"The problem is that many downsizing or reorganisation programmes are turning out to be bloody and, sometimes, fatalto the organisation itself. Instead of saving the organisation...these lead to intense conflicts that consume the organisation until it dies," he said.

Options such as job rotation, a moratorium on wage increases, or even cutting executive perks and wages should be considered, he said.

One company instituted a three-day working week, but still failed to keep costs down. "I told them to go on a two-day work-week if possible. Just keep the jobs," Ofreneo said.

May First's Sarmiento said the government should abandon its economic liberalisation policy which has put so many local companies at a disadvantage.

"If job retrenchment continues to snowball, there will be ahead-on collision...We are seeing more restiveness among workers all over the country," he warned.