At least nine multinational companies have expressed keen interest to put up textile or garment factories in the Philippines as part of their expansion plans to meet the growing demand here and abroad, especially as economies bounce back from the pandemic.
“Normally, these investors will have an ocular trip for assessment, then project study will follow. So, it’s in the near term like before the year-end,” said Robert Young, Philippine Exporters Confederation Inc. (PHILEXPORT) trustee for textile, yarn and fabric sector, and Foreign Buyers Association of the Philippines (FOBAP) president.
Young said four multinational companies from Cambodia, three from India, and two from Vietnam indicated their intentions to invest in the Philippine garments and textile industry during their one-on-one business-to-business (B2B) meeting as part of the 54th Asean Economic Ministers Meeting and Related Meetings held in Cambodia last Sept. 11 to 18.
He said these planned investments are expected to generate about 9,000 jobs initially, and increase garments and textile exports by $500 million per year.
Young said an ideal textile fabric mill would have an investment of minimum US$1 million, while a garment apparel factory would be from US$300,000 to US$500,000.
“Demand on textile is high for the 110 million Filipino population with no local manufacturing source, annual domestic clothing spending amounts to approximately US$2 billion, not to mention the potential in the export business,” he added.
Young said the Philippine garments and textile industry exports are estimated at US$1.5 billion, with a growth rate of 10 percent annually.
Should these potential investments materialize, he said, key export markets they can cater to include the United States (US) and European Union (EU), as well as the Asean economies.
Exports to the EU enjoy the benefits through the Generalised Scheme of Preferences Plus (GSP+), as well as the US’ GSP which will be reinstated soon, he added.
“(So) it’s viable (investment) in the Philippines, the reason being (also) is the overcrowding factories in countries like Cambodia, Vietnam and India,” he said. “The expansion plans by multinational investors normally are spread over the region and not putting ‘all the eggs in one basket.”
Young said he reported to these investors that the Philippine government has approved the Foreign Investments Act, Public Service Act, and the Retail Trade Liberalization Act.
“These aim to attract foreign investors by easing the barriers to inbound foreign investments. Moreover, the measures were enacted to push economic recovery by welcoming new capital, ideas, and technology that come along with the foreign investments,” he added.
Meanwhile, Young’s engagement as a private sector representative at the 54th Asean Economic Ministers Meeting and Related Meetings was sponsored by PHILEXPORT, in partnership with the Asean India Business Council and FOBAP.