Exporters hopeful US will pass crucial garment act

MANILA, Philippines - The local government is hopeful that the US Congress will pass a vital garments bill known as “Save Our Industries Act of 2009” during the first quarter of this year.

 “We are still hopeful that it will be taken up in the first quarter,” Trade Assistant Secretary Fe Agoncillo Reyes said. “We are looking at a lot of options.”

When enacted into law, House Resolution 3039 would allow Philippine garment manufacturers to import and use US textiles for reshipment to the United States as finished garments under the cut-and-sew concept, duty-free. The normal tariff for such goods is 30 percent to 40 percent.

For this year, she said that they will try to get back the investors that they lost when the industry hit a bump. “We are talking to buyers and sellers. We are trying to upgrade our facilities and win them back.”

Local players are likewise looking forward to the passage of the bill, Luen Thai chief executive Henry Tan said there is really a need to push for this bill because the wages in other countries like Bangladesh are very low when compared to the Philippines. He said they only remain cost effective in the Philippines due to the efficiency of workers.

Their Philippines plant is their second largest operations in the world after China. Tan said that the Philippines is the second biggest producer of garments.

“The industry is solidly behind the bill,” Tan said.

Tan said they are prepared to double their multi-million peso investment here in the country. Currently, they have three manufacturing facilities in the country. They are in Clark, Camp Olivas in San Fernando and Cebu.

“We will double our size in the Philippines,” Tan said. This translates to 5,000 to 6,000 new jobs for Filipinos. Tan said they have a total of 3,000 employees in their Luzon operations and 2,000 in Cebu.

“We can easily expand in the Philippines because it is cost effective here,” Tan said. Once the bill is passed, Tan said they can cater to the second layer of garment brands like JC Peney and Sears. 

Their Luzon plant produces 90 million pieces per year and supplies T-shirts and other garments to Ralph Lauren, Dillards and Victoria Secret to name a few. Their Cebu plant on the other hand manufactures sports wear for Adidas.