No relief yet for garment exporters — DTI

Local garments manufacturers and exporters will not get relief until the summer of next year when the US garments market begins to recover from the slump that has kept inventory levels up and new orders down compared to year-ago levels.

After its recently-concluded sales blitz in the US, the Department of Trade and Industry (DTI) said the country’s biggest garments market showed signs of recovery that would not be felt until mid-2002.

Trade and Industry Secretary Manuel Roxas II said yesterday that Philippine-made men’s and women’s apparel as well as babies’ and children’s wear were looking at increased sales in the US as leading apparel brands increased their orders for the next summer season.

According to Roxas, major buyers such as Baby Togs, Ann Taylor, Liz Clairborne and Perry Ellis/Salant were placing more orders with Filipino manufacturers.

He said that Liz Clairborne, specifically, had increased its order by 15 percent with a value of $7.8 million, raising the total order from $50.8 million in 2000 to $59.6 million.

According to the Garments and Textiles Export Board (GTEB), total imports from the Philippines are expected to reach $80 million in 2001 as the market recovers from the slump. This is a marked improvement compared to the $60-million worth of apparel imported by the US in 2000.

GTEB Executive Director Felicitas Agoncillo-Reyes said that the US apparel market had been "very soft" this year, with global imports growing by only 4.5 percent from January to May compared to the growth figures posted over the same period in 2000.

"American retailers, especially department stores, are having problems generating consumer traffic and thus have high inventory levels with retail recovery now being anticipated by the summer of 2002 at the earliest," Reyes said.

Reyes reported that initial signs of recovery were now apparent, with leading brands such as Baby Togs increasing their orders by 112 percent as of June this year, with further orders for an additional $3-million worth of products.

Other buyers like American Eagle Outfitters, Pretty Talk of Canada and Nautica have also expressed interest in Philippine-made products, with other prospective buyers such as Philips Van Heusen.

"We need to look at such cost factors since buyers and retailers who are primarily price-driven, will chose lower-cost countries," Roxas said. He said the country also has to compete with countries that would stand to benefit from preferential trade arrangements with the US in the coming years, such as sub-Saharan Africa.

Garments shipments to the US from sub-Saharan Africa would soon be covered by duty-free arrangements beginning this year and would give them an estimated 17.5 percent advantage over Philippine exports, in terms of landed costs.