Garments, textile and apparel exports are expected to reach US$1.5 billion this year as the country remains in the radar of major chain store buyers despite the lingering pandemic and the Russia-Ukraine crisis, according to the Foreign Buyers Association of the Philippines (FOBAP).
Robert Young, FOBAP president and Philippine Exporters Confederation Inc. (PHILEXPORT) trustee for textile, yarn and fabric sector, said local industry players have received orders which other countries, such as Vietnam, China, India, and Bangladesh, could not serve due to minimum order quantity requirement.
“We will hit it (target) easily because we have all the orders right now on hand,” Young said. “We can now project that the $1.5 billion (exports volume) for 2022 yearend is just a walk in the park.”
He said that despite the supply chain problem due to port congestion, “we have a track record to boast of that we were number two in the whole Asia and exportation of garments and apparel therefore, we are still being considered as an alternative for the garment production of these foreign buyers.”
But with the Ukraine-Russia crisis, Young said “it will definitely be an uphill move to obtain the target for 2022” due to the trade sanctions of garment export suspension to Russia where the Philippines produces some products, such as Levis and Inditex.
Citing records, Young said shipments of the Philippines on apparel, textile and garments reached $1.052 billion in 2021. Garments and apparel exports hit $758 million while textile at $294 million.
He said there were actually $200 million worth of finished goods ready to be shipped by the end of 2021, but remained at the port due to the congestion. These goods only exited the port terminal facility last February.
“FOBAP, six months ago, had a projection that it would be $1.2 billion (exports volume for 2021) so we hit it. We are very elated for the Philippine economy that the garments business improved as compared to previous year, you really saw an increase in percentage despite the pandemic,” he added.
Young said bulk or 80 percent of these goods were shipped to the United States, while 20 percent to the European Union, Australia, Canada, and Asean countries.
“Our aggressiveness (in marketing) is really there, we work 24/7, we are scouting for other orders which the other countries are not accepting due to the minimum (volume) requirement,” he said.
Meanwhile, Young hoped that the next leadership will implement a comprehensive doable and sustainable roadmap to boost the textile and apparel industry.
“A serious consideration on the (revival of) nuclear power plant will finally solve our power cost, energy problem, that’s number one. Number two, the wages must be somehow reexamined and restudied,” he said.
“There should also be a grant on tax deduction for export because this will somehow encourage the foreign investors to come in. The CREATE (Corporate Recovery and Tax Incentives for Enterprises) law is there, but it’s not enough. We have to make an added feature attracting these foreign investors,” he added.
Republic Act 11534 or the CREATE Act introduces reforms to the corporate income tax and incentives systems.