RP pleads for garment sector in US

MANILA, Philippines - Representatives from the Philippine government are now in Washington DC to plead with the US Congress to fast track the Save Act which is expected to help the local garments industry.

In an interview before heading to the United States, Trade Undersecretary Elmer C. Hernandez said that they are asking the Congress to pass the bill on time because the country will lose competitiveness if the bill is delayed further.

Hernandez said that they have been in consultation with local garments exporters who said that they will only expand their investments here if the bill is passed in the US. Likewise, Hernandez feared that some current investors will leave to more attractive investment destinations.

When enacted into law, House Resolution 3039 or the Save Act would allow Philippine garment manufacturers to import and use US textiles for re-shipment 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.

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.

Luen Thai Philippines plant is the company’s 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.