Garment exports seen to drop by 5% in 2002

Garment shipments for the whole of 2002 are expected to drop by more than five percent to $2.8 billion from $2.974 billion in 2001, the Garments and Textile Export Board (GTEB) said yesterday.

For this year, GTEB executive director Serafin Juliano said garment exports are still expected to contract by three percent due to the generally weak global demand for locally-made garments and the stiff competition poised by other low-cost producing countries.

The country’s major markets for garments are the US and Japan.

However, despite the continued twin threats of weak demand and stiff competition from other producers, Confederation of Garments Exporters of the Philippines (CONGEP) chairman Donald Dee, said recently that the reforms instituted by the government have boosted the industry’s competitiveness.

Government had instituted an industry restructuring program which granted incentives to garment exporters who modernized and improved their operations.

The restructuring has boosted the confidence of garments manufacturers, Dee said.

"We are confident that we can retain at least $2.8-billion exports even if US quotas are abolished today," Dee said.

As part of its commitment under the World Trade Organization (WTO), the US is set to abolish quota allocations by 2004.

Under the US quota system, select countries enjoy fixed quota allocations for their garment exports.

Without the quota allocations, countries like the Philippines which used to enjoy a fixed allocation, would now have to compete more aggressively with other garment exporting countries.

As a result, instead of concentrating on cheap garment exports, the government is urging local garments manufacturers to concentrate on high-end brand garments.

Philippine Luen Thai Holdings president Willie Tan said that the local garments industry should have discipline to produce quality goods and invest in increasing their capacities.