Global players’ plans to re-shore or onshore manufacturing of clothing and apparel threaten to send the local industry to extinction, according to Robert Young, trustee for textile, yarn and fabric sector of the Philippine Exporters Confederation Inc. (Philexport).
Young said global events such as the recent pandemic and the war between Russia and Ukraine, the dependence on Asia, and the orientation for imports and apparel production is transforming the sector.
Manufacturing companies plan to bring business operations and processes to a neighboring site or right on the location of the importing country, said Young, also president of Foreign Buyers Association of the Philippines.
He said plans of reshoring or onshoring of manufacturing can result in the imminent closure of the present apparel manufacturing for export market and its related industries in the Philippines, as well as the massive displacement of the apparel workers.
“Thus, it may cause the extinction of such (an) industry,” he added. “This is a big red flag for the Philippine apparel and clothing industry.”
To deter the transfer of the manufacturing firms, Young particularly cited the need to address the basic root causes of uncompetitiveness of Philippine apparel in international markets, such as restrictive cost of power, labor and logistics.
“The biggest challenge is the concern of a much higher labor rates component in importing economies,” Young said.
Under the Philippine Export Development Plan (PEDP) 2023-2028, export stakeholders aim for adequate support for export firms’ infrastructure requirements, such as in power, transport and logistics, and telecommunications connectivity.
“The new digital and robotics manufacturing that will play a significant role in the reduction of labor cost is also part of the plan,” Young said.
“The government and the private sector must realize the negative impact of these reshoring scheme plans and should join hands in seriously implementing solutions urgently as per the PEDP report for the survival and competitive advantage of the Philippine clothing and apparel manufacturing, thus saving it from extinction,” he added.
