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Flat growth likely in Philippines' garment exports in 2020

03
Mar '20
Pic: Shutterstock
Pic: Shutterstock
Philippine’s garment exports are being projected to register flat growth this year as firms struggle to find alternative sources for raw materials outside coronavirus-hit China. Robert M Young, president of the Foreign Buyers Association of the Philippines (FOBAP), said nearly all of the country’s apparel production is stopped due to raw material unavailability.

The crisis triggered by the virus outbreak in China that forced many factories in the Philippines to shut down.

“At present, almost all of our apparel production are now halted due to raw materials delayed deliveries from China, Korea, Taiwan and other Asian countries,” Young said in a recent statement.

Finding alternative sources for fabric, textile and accessories is a must as there is no trusted domestic manufacturer of these raw materials, according to media reports in the country.

This is the reason why the garment industry is tempering growth forecast this year, expecting export receipts to stay the same or rise by a mere 1 per cent.

Young said the industry is anticipating new players to come in when the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill becomes law, as it will reduce corporate income tax to 20 per cent by 2029 from 30 per cent now, the highest rate in Southeast Asia.

In terms of market, the FOBAP chief said the United States will keep its status as the country’s largest buyer of clothing products this year and can further strengthen this position if it expands the generalised system of preferences (GSP) of the Philippines to garments and footwear.

Fibre2Fashion News Desk (DS)


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