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Chinese garment firms consider Philippines for relocation
21
Jan '11
Owing to the rising cost of labour in their country and visible irregularity in other offshore operations, the garment producers in China are preparing to outsource the production jobs to Philippines.

An expert from China, while speaking on the sidelines of the "Doing Business for the China Market" conference, recently held in Philippines said that, by using skilled workers Philippines can help China in building a brand image and also in marketing its apparels to the global buyers.

The expert further said that, it is not that they are considering Philippines for outsourcing production jobs, but rather the country is also a good place for investment. Though they need to think about various other features like the cost of labour, government policy, but then the Chinese firms have enough potential to invest in markets abroad, he added.

Prior to this the Chinese firms had never took trouble to look upon Philippines as a site where they can relocate themselves, but now owing to the rising cost of labour in the homeland as well in the other low-priced garment producing countries like India and Vietnam, they are doing so.

Here, a Filipino expert informed that, the labour rates in China now stand at somewhere around $500 to $600 per month, and are likely to go up by around 15 to 20 percent over the next three years. As against this, the labour rate of over $300 prevailing in Philippine market seems to be comparatively lower.

He further stated that, while the wages have gone up by almost two times in Vietnam to touch $180 to $200, and the same is expected to register a rise of another 20 percent over the next one year, whereas the wages in India are likely to grow to double over the next five to six years.

Even with the recent revision in the pay structure, the wages in Philippines are quite affordable and provide a cost advantage to the country.

The Filipino expert even stated that, the country apart from having a huge team of middle level managers, quality assurance staff and industrial engineers, also offers skilled labour, and that helps it to maintain stability in the production in garment industry.

Philippines is famous for the quality of its goods, timely delivery and flexibility but then it cannot be tagged as one of the countries offering products at cheapest rates and that too particularly in the larger markets where it lost its market share since withdrawal of the ceiling on exports in 2005.

Fibre2fashion News Desk - India

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