CONGEP warns of job losses

The Confederation of Garment Exporters of the Philippines (CONGEP) warned yesterday of a possible loss of 200,000 jobs in the garments sector in the next years if the government is not able to secure a Tariff Preferential Agreement (TPA) specifically for the garment sector alone from the United States.

In a press conference, CONGEP officials Michael T. Que and Ma. Teresita Agoncillo, pointed out that the garments sector is the country’s second biggest dollar earner, bringing in $2.8 billion per annum and providing employment for 400,000 workers.

However, Que and Agoncillo warned, the $2.8 billion export earnings could easily be halved in three years’ time if government does not help the garments sector secure a sector specific TPA with the US.

The Philippines, they warned, is facing stiff competition from such countries as Bangladesh, Pakistan, Sri Lanka and India.

China, which is also a big competitor, is currently hampered by the imposition of a safeguard tariff by the US effective until 2008.

The Philippines, Que and Agoncillo, said have a cost disadvantage of 20 percent compared to the rest of Asia.

Local garments exporters are faced with a 17 percent tariff on their garments and textile exports and are also being squeezed by an annual five percent reduction in price from buyers because of the intense competition, Que and Agoncillo said.

As such, the garments sector is hoping that the government can secure the TPA which would allow duty-free entry of Philippine-made garments to the US.

However, as part of the effort to secure the TPA, the garments sector is securing the services of a US lobby group to help convince US to extend such an agreement to the Philippines.

The garments’ sector has asked the Philippines to shoulder the cost of securing the services of the US lobby group, while expenses for other local activities such as an information campaign about the need for such a TPA would be shouldered by the garments sector.