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Philippines apparel exports down 16 per cent

Philippines’ apparel exports decreased 16 per cent last year. The entire garment industry, including shoes and travel goods, is estimated to employ 2,50,000 people. The industry is labor-intensive. Right now it’s agitated over a bill which seeks to overhaul the country’s incentive regime to investors. Small firms fear they would be the first to succumb under the bill. For a company with 1,500 workers and below, the impact is expected to be an immediate shutdown, within six months to a year, since their margins are small. For those producing mid-sized products, like jeans, the displacement of workers is expected to be 50 per cent in 12 months to18 months. These are medium-sized firms employing 3,000 to 5,000 per factory. For firms producing higher end products, like suits, the displacement threshold is expected to be 30 per cent to 32 per cent in 12 months to 18 months.

The US accounts for 60 per cent of the Philippines’ garment exports. The rest are sold to the EU and Asian countries. The country lost 70 per cent of its market over 15 years due to a number of reasons, primarily the removal of the quota system that led buyers to source from other countries offering the same products at half the price.

 
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