Garment exporters see flat growth this year

MANILA, Philippines — Local garments manufacturers expect export earnings to post flat growth this year as the COVID-19 outbreak has affected delivery of raw materials used for production.

The Philippine Exporters Confederation Inc. (Philexport) said garments manufacturers see their export earnings increasing just by one percent this year.

According to data from the Philippine Statistics Authority, the country’s garments exports were valued at $906.289 million last year.

“At present, almost all of our apparel production (are) now halted due to delayed deliveries of raw materials  from China, Korea, Taiwan and other Asian countries. The Philippines has no local source or back up industries such as fabric, textile and accessories  as every item is imported,” said Robert Young, trustee for the textile, yarn and fabric sector of the Philexport and president of the Foreign Buyers Association of the Philippines.

COVID-19, first seen in Wuhan, China last year, has affected many countries including South Korea and other Asian countries.

While COVID-19 has affected operations of the country’s garments manufacturers, Young is upbeat foreign buyers will continue to look at the Philippines as a source for clothes to be sold.

He said industry players are also hopeful new investors in garment factories will enter the country once the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) is passed into law.

CITIRA or the second package of the government’s tax reform program will gradually bring down the corporate income tax rate to 20 percent from 30 percent, and rationalize fiscal incentives given to firms by making the grant of such performance-based, targeted, time-bound and transparent.

“New factories will come in and then with our advocacy on CSR (corporate social responsibility) and the improvement of the conditions of the factories, I think we will get more orders and somehow, that can attract more orders for the Philippine garments,” Young said.

With a roadmap in place to promote the growth of the local garments sector, he said the industry is hopeful such can lead to increased garments orders from the Philippines.

“Hopefully, that adds to the increase of the garments orders,” he said.

He said the US remains the country’s biggest market for garments this year.

“Right now, the GSP (Generalized System of Preferences) is only for the giftwares and all these hard goods. We are hoping that (in) the new GSP come December 2020, we will include the footwear and garments in the US GSP,” he added.