Garments, textile sector seeks subsidy to cut cost

Garments and textile industry players are asking the government to allocate a portion of its Conditional Cash Transfer (CCT) budget to subsidize a part of the wages of their workers in a bid to reduce their costs and export selling price that will help them compete in the global market.

“This is like incentivization of employment, that’s what we call it. (Our) proposal is to provide and include in the government program cash incentives to cover hiring of garments and apparel workers for factories,” said Robert Young, Philippine Exporters Confederation Inc. (PHILEXPORT) trustee for textile, yarn and fabric sector.

Young said while the government provides conditional cash grants mostly for jobless people, the so-called subsidy can be given also to those employed, particularly in the garment and textile sector.

The Philippines, he added, can no longer compete with the international market in terms of prices particularly of basic items such as t-shirts, denim pants, sporting goods, and athletic wear.

“We used to be number one in these items, (but) not anymore because of our labor cost, power cost, and together whatever reason like for instance the efficiency of the workers. All these kinds of factors and disturbances are factors that lead to the non-acceptance of what the buyers of our prices because it is quite high, it’s really high compared to other countries such as Lao, Myanmar, Vietnam,” Young said.

“So we thought of that to help the factories, assist them so that the cost will be lower,” he added.

Young, also president of Foreign Buyers Association of the Philippines (FOBAP), believed that such subsidy can help reduce the export selling price of the garments thereby, the Philippines can compete with other countries.

He further said various associations are pushing for such incentivization of employment, including the Confederation of Wearable Exporters of the Philippines, Garment Business Association of the Philippines, Textile Millers Association of the Philippines, Garment Manufacturers Association of the Philippines, and FOBAP.

“We still have to consult the DOLE (Department of Labor and Employment) about this of course. DTI (Department of Trade and Industry) with DOLE will have to somehow collaborate and agree on the terms,” he added.