Garment firms ask BOI to relax export rules

Local garment exporters are asking some relief from the export requirements of the Board of Investments (BOI).

In a proposal sent to the BOI, local garments exporters are asking that the requirement be temporarily relaxed while they are recovering from the effects of the economic downturn.

Based on the BOI’s registration policy, Filipino garment manufacturers must export at least 50 percent of their production, while foreign garment manufacturers must export at least 70 percent of their production.

BOI sources indicated that the government agency is sympathetic to the problems currently faced by local garment manufacturers.

Sources said the BOI will be willing to grant the request on a case-to-case basis to companies that can submit an export build-up program that will make up for the temporary reduction in their exports.

The same sources said local garment manufacturers that had been performing well and meeting their export targets before the economic downturn would likely be granted their request to temporarily reduce their exports.

However, they must also submit an export build-up program where they would gradually increase their exports and make-up for what exports they had temporarily reduced.

If the exporters, however, fail to make good on their submitted export build-up program, BOI sources warned, they would face sanctions. These sanctions would include the withdrawal of income tax incentives. The BOI may even require these garment exporters to refund their incentives back to the government, the sources said.

BOI sources also revealed that the government is thinking of leveling the playing field by removing the distinction between Filipino-owned and foreign-owned garment manufacturers.

The same sources said the BOI wants to just set one export requirement for all garments exporters.

However, the new policy has to be legislated and the government is including this policy change under the revised Omnibus Investment Act, the sources added.