‘State-built factory to meet textile-export demand’

GARMENT industry players are urging the government to build wearabletextile factories to keep up with export orders particularly from the European Union (EU), according to the Philippine Exporters Confederation Inc. (Philexport).

Philexport Trustee Robert Young said a single factory is all that’s needed.

“Just one will be enough, we have to quickly start something so that these foreign investors will follow suit,” Young, also president of Foreign Buyers Association of the Philippines (FOBAP), was quoted as saying in a statement issued by the Philexport lastwednesday.“garments, once it’s there, can be a lifesaver to any economy just like in Bangladesh and Vietnam, India, Laos [and] Cambodia.”

The trustee for Philexport’s textile, yarn and fabric sector said they have been requesting the government to build a pilot commercial-scale wearable textile factory. The request comes as the Philippine garments exported to the 27-member bloc

EU are slapped with a 12 percent or higher duty due to its“strict”rules of origin (ROO). The rules impose a ceiling for value-added inputs sourced from a non-generalized Scheme of Preferences (GSP) beneficiary country.

This, even as these goods enter into the EU market duty-free under its GSP Plus, Young said.

“They [EU] prefer that the fabric we will be using will be sourced from the Philippines. So this is one way of saying the Philippines has to produce its own fabric,” he explained. “Which as everybody knows is not possible because we do not have the textile industry in the Philippines right now to be used for these products for exports and therefore, we have to import.”

Young added that the Philippines would not qualify for the EU GSP+ zero duty “if it’s imported fabric that we use.”

With this, the Philexport said building a pilot factory to produce the country’s own fabric or textile is “imperative,” especially with the revival of talks for the Philippines’s bilateral free trade agreement (FTA) with the EU. The latter Young expects to “also prescribe the same ROO on textile usage for exported garments.”

Young said the industry players are expected to hit just 80 percent of their target garment and apparel exports of at least $1 billion this year with EU’S enforcement of these ROOS.

“We underperform now. How will we perform [if] you are not allowing us to use imported materials? There is another way to use the imported material but we have to buy from an FTA country, which has a bilateral agreement with the Philippines,” he said. “We have to look for these kinds of countries.”

Young said the EU currently accounts for only 10 percent of the country’s total export receipts of garments, textile and apparel.

The US is the main export destination, followed by Australia, Canada and Japan.

Young also noted the industry group has been requesting the government to submit a derogation letter to the EU to allow the country to use imported fabric and qualify for zero duty while the pilot factory is not yet built.

Meanwhile, the Philippine garment industry recently sought assistance from the US Department of Commerce on trade issues like detained apparel exports due to ROO issues.

Washington prohibits the importation of goods into its country that are manufactured with forced labor in China, especially from its Xinjiang region.

“The Uyghur Forced Labor Prevention Act, also known as the UFLPA, directs the Forced Labor Enforcement Task Force to develop a strategy for supporting enforcement of the prohibition on the importation of goods into the United States manufactured wholly or in part with forced labor in the People’s Republic of China, especially from the Xinjiang Uyghur Autonomous Region, or Xinjiang,” the US Customs and Border Protection website noted.