The Philippines has to make a big push in positioning itself as a garments manufacturing hub, particularly for companies that are relocating from China due to the latter’s trade war with the United States.
Government, however, is launching a garments and textile roadmap that will focus on niche products, such as garments from upcycled materials or scrap, since the country is no longer competitive in everyday fast fashion.
Andrew Kay, managing director of industry event organizer CP Exhibition, said the garments industry is politicized as shown in the ongoing trade tiff between the two countries, wedging the sector in between.
Kay said threats of higher taxes on China-made goods have created uncertainty which, once finalized, will force these China-based companies to move to other countries.
Vietnam, Kay said, is one of the countries being eyed by these companies but that country is experiencing shortage of land while manpower and power are getting expensive.
Kay added: “They can choose Bangladesh, Burma or Africa. But will they consider the Philippines?”
He said the Philippines should drum up the fact that wages in many parts of the country are not that expensive and are comparable to the average wage of Vietnam.
“Filipinos are hardworking, careful, skillful and learn fast. I hope because of these, the Philippines can become a production center. Right now (companies) do not consider the Philippines as a center. We have to try harder,” Kay said.
Corazon Dichosa, Board of Investments (BOI) managing head, said the Philippines has to rely on imported fabric which affects costing.
Kay said like CP’s experience in Vietnam, the Philippines should hold roadshows to countries like China, the biggest supplier of basic products like textile, even US and Europe particularly for design.
High cost of power and smuggling have also been an issue.
Dichosa said given the lower costs of production and more integrated garments and textile manufacturing hubs in the region, it has become difficult to compete in fast fashion.
The current profile of the garment exporters, which predominantly serve more premium brands, is reflective of the difficulties in competing in a highly cost sensitive market.
Dichosa said the BOI is looking at developing niche segments in the industry that can command more premium prices – due to high local value addition (products that put high premium to Philippine creativity and design), and/or because it supports sustainable and inclusive business models.
She said there is growing interest and uptake abroad for sustainably sourced and produced products.
The BOI also noted the need to develop the design segment of the industry’s value chain.
“There is a need to develop and attract businesses in the industry that are design-driven (original design or brand manufacturers), moving away from the simpler cut, make and trim business models, to improve value-addition in the industry. Aside from this, the promotion of the garments and textile industry, particularly of our indigenous weaves, is an important vehicle to promote Philippine culture,” Dichosa said.
Based on the performance of the manufacturing sector from 2016-2018, only the textile manufactures and wearing apparel subsectors have posted a decline in gross value added (GVA) compared to average GVA of the sectors in 2013-2015 by 7.7 percent and 2.7 percent, respectively.
CP and Philippine Exhibits and Themeparks Corp. are organizing the 2nd Philippine Garments, Leather Goods Industries and Textile Expo to be held December 5 to 8 at the SMC Convention Center in Pasay City.