RP readies 'plan B' in case US Congress won't pass Save Act

MANILA, Philippines – The government is readying a plan ‘B’ just in case the United States Congress does not pass the Philippines’ proposed ‘Save Our Industries Act’ which is expected to save the local garments industry.

The proposed Save Act allows the assembly of American textiles and yarns in the Philippines for re-export to the US at preferential or zero duty.

In addition, garments made of US spun yarn or extruded yarn formed in the Philippines, may re-enter the United States at 50 percent of the most favored nation (MFN) duty.

In a press conference, Trade Executive Director Lucita P. Reyes said that the plan of the government is to tap the European market as an alternative destination for locally-made garments.

The United States is the country’s biggest market for garments.

Reyes said that they are already mobilizing the Filipino communities in the United States to help convince their Congressmen and Senators to sponsor the Save Act. There will be an election on November and Reyes said this can be helpful in passing the bill.

“We are still hoping it could pass but we have a plan B and that is to explore the European market,” Reyes told reporters.

According to her, they are also considering the countries that the Philippines have a free trade agreement with as a possible export destination. “We want to make use of our FTAs in order to gain access to other countries.”

The Philippine garments export industry, during its peak, employed around 600,000 workers but was whittled down to 150,000 as cheaper garments are being manufactured from neighboring countries.

In 2008, US garments exports to the Philippines amounted to $20 million. The Save Act bill is expected to significantly increase US exports to the Philippines and sustain thousands of US jobs for over a 10-year period. US textile manufacturers project an additional $100-200 million in the medium term.

To ensure strict customs enforcement and prevent transshipment of apparel, the Philippine government assured the US that it continues to enforce the memorandum of understanding concerning cooperation in trade in textile and apparel goods it signed with the US in August 2006. The Philippines will also establish procedures to allow the US access to information for shipments before they reach US Customs, similar to the electronic visa information system (ELVIS), which had previously been in force in the Philippines.