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The Philippines Readies Roadmap to Revive Garment Industry

The Philippines is on the cusp of finalizing a new industry roadmap to revive its textile and garment industry and restore its competitive edge.

The brainchild of the Board of Investments, the 10-year plan seeks to strengthen links between government, industry and the private sector, establish a dedicated trade office, and put an end to the proliferation of used-clothing imports from North America and Europe that compete with domestic suppliers.

Other strategies featured in the Southeast Asian nation’s Textile-Garment Industry Roadmap 2020-2029 blueprint, according to local media, include better integrating the garment and textile sectors, earmarking capital and land to increase production, encouraging the purchase of new equipment and providing fiscal incentives to manufacturers through lower value-added taxes and reduced power rates.

The roadmap also recommends tackling infrastructure gaps and logistical bottlenecks, investing in product development and marketing, incorporating loom weaving into the school curriculum and cleaning up the textile value chain by requiring the registration of chemicals and substances.

By taking advantage of free trade agreements and the Philippines’ Generalized System of Preferences status, the government says it wants to position the Philippines as one of the top 10 global garment and textile exporters with an annual export growth of 45 percent.

Still, like many countries that rely on China for raw materials, the Philippines is feeling the economic pinch of the coronavirus outbreak. Local garment manufacturers say they expect export earnings to be flat this year as the spread of COVID-19 continues to shake markets.

“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,” 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, told BusinessMirror. “Reason being is that Philippines has no local source or back-up industries…as every [fabric, textile and accessory] item is imported.”

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But Young says he hopes that proposed legislation, such as the Corporate Income Tax and Incentives Rationalization Act (CITIRA), will attract fresh investments to the country’s garment factories. CITIRA, for instance, seeks to lower the corporate tax rate from 30 percent to 20 percent over the next 10 years.

“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 Philippine garments,” he added.

The finalized roadmap will also help. “Hopefully, that adds to the increase of the garment orders,” he said.