Local garments manufacturers expect their export earnings to be flat or increase measly by one percent this year amid global uncertainty.
“At present, almost all of our apparel production (are) now halted due to raw materials delayed deliveries from China, Korea, Taiwan and other Asian countries. Reason being is that Philippines has no local source or back up industries such as fabric, textile and accessories, etc. as every item is imported,” said Robert Young, trustee for the textile, yarn and fabric sector of the Philippine Exporters Confederation Inc. and president of the Foreign Buyers Association of the Philippines.
The coronavirus disease 2019 (Covid-19), which originated in Wuhan, China in late 2019, has also affected several countries including Korea, Taiwan and other Asian countries.
But Young was optimistic the Philippines would still be in the radar of the foreign buyers, as people continue wearing clothes.
He said industry players are also hoping that new investors of garment factories will come in once the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA) is passed.
The second package of the comprehensive tax reform program, CITIRA seeks to gradually lower the corporate income tax rate from 30 percent to 20 percent over the next 10 years, and rationalize fiscal incentives currently being enjoyed by select firms.
“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,” he
Young also cited the submission of the Board of Investments (BOI) of the roadmap for the garments industry.
“Hopefully, that adds to the increase of the garments orders,” he said.
Young said the United States remains their biggest market 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.
Under the US GSP program, tariffs are eliminated on about 5,000 tariff lines if beneficiary developing countries meet the eligibility criteria established by US Congress.
These criteria include respecting internationally recognized worker rights, providing adequate and effective intellectual-property protection, and providing the US with equitable and reasonable market access, among others.