Textile/garment industry revival pushed
The Philippines sees resurgence of the garment and textile industry as government is finalizing development roadmap, fiscal incentives to new investments, GSP schemes, and securing new markets under the country’s free trade partners.
Through the Industry Development Program (IDP) under the government’s Manufacturing Resurgence Program, the Board of Investments (BOI) is formulating a Roadmap for the Garments and Textile Industry, which will chart the future of the industry’s growth based on assessment of the current situation and economic performance, identification of industry roadblocks.
Starting in December 2017, the BOI conducted several workshops with industry stakeholders and other government agencies and organizations nationwide. The Roadmap is expected to be finalized before the end of 2018.
Department of Trade and Industry (DTI) Secretary Ramon M. Lopez told reporters at the Philippine Garment Leather Goods Industries & Fabric Expo that the government is maximizing benefits from the European Free Trade Agreement. The industry also enjoys the EUGSP Plus scheme, which grants preferential tariff on garments and textile. The US-GSP has also included leather goods but not yet on footwear and garments.
Hopefully, Lopez said the country’s garment and textile exports will be further increased once the Philippines and US enter a free trade agreement (FTA) deal.
“Hopefully, we can fast-track our FTA negotiation with the US as we see in the horizon,” Lopez said. The proposed FTA with the US presents the biggest opportunity, but negotiations have not yet stated. Discussions have remained at the TIFA (Trade and Investment Framework Agreement) where both parties agreed to settle concerns on import valuation and payment gateways.
At present, garment and footwear are not yet part of the US-GSP scheme. The Philippines is still lobbying for footwear and may also expand to include garments.
In the meantime, Lopez said that the government continues to support garments and textile investments that bring in new technology and innovations by granting them tax and fiscal incentives such as income tax holiday and zero duty of capital equipment.
“We are inviting other countries such as China, India because they are good in textile because we really lost our textile while other countries have become more competitive in producing textile basically. We’re better off importing for so many years, but once we have again the demand for garments, the more we can supply,” he said.
In order to catch up with the textile industry, Lopez said the Philippines should concentrate on jeans fabric which can have an economies of scale. One local firm producing some textiles is IndoPhil.
“With modern technology, we can support them with BOI registration,” he said.
The country’s garments and textile export sector which used to be a US$3billion industry, was once considered a sunrise industry during the 1990s.
The country’s garment and textile export is expected to post between 1020 percent increase this year as some orders are now being shifted from China to the Philippines to avoid the high tariffs imposed by the US on Chinese goods, including garments and textile.