Garments displaced as second biggest export item

15 Jun '11

3 min read

In spite of a three year old ongoing programme to revive the garments and textile industry of the country, coconut oil surpassed garments as Philippines' second biggest export item in March 2011.

The Department of Trade and Industry (DTI) is yet to come to terms with the fact that the garment industry is in problems after the end of the quota regime in 2005.

Coconut shipments while registering a year-on-year rise of 78.5 percent jumped to US$ 183.19 billion in March 2011, and comprised 4.21 percent of the country's overall exports during the month. As against this, garment exports during the month stood at US$ 148.81 million, showing a year-on-year rise of 1.92 percent.

The DTI accepts that the end of the quota regime has pushed the Philippines garment and textile industry into a state of uncertainty. The liberalised market during the post-quota period in Philippines has benefited countries like Vietnam, China and India.

The Philippines Government has yet not fully implemented the Garments Industry Transformation Plan (GITP). As per the GITP, devised in 2008, the special industry fund sanctioned through Executive Order 285A would partially be used for such programmes that are aimed at revival of the garments and textile industry.

Nonetheless, the DTI said that in order to equitably distribute and maximize the incentives and opportunities being made available under the scheme, it is vital to first of all identify all the legitimate industry members across the nation.

A big concern for the Philippines garment industry is the unavailability of a centralized database providing complete, precise and latest information regarding the industry, according to the Garments and Textile Industry Development Office (GTIDO).

The ending of the automatic centralized capture of data and information of the garment and textile industry due to the deactivation of the Garments and Textile Export Board (GTEB) in 2005, is held responsible for the non-existent database, by Thelma Dumpit–Murillo, Executive Director of GITDO.

After the deactivation of GTEB, its other functions were delegated to various agencies of the Government/DTI.

Prior to 2005, when the quota regime existed, the garments and textile industry was the country's second-biggest exporter, just behind electronics.

In 2003, Philippines exported US$ 2.4 billion worth of garments and textiles, 84 percent of which was shipped to the US. At the same time, the sector was also the biggest direct employer employing around 600,000 workers and was amongst the worlds' leading garment and textile suppliers.

When the quota ended in 2005, many producer-exporters ceased their operations or shifted them to other comparatively cheaper manufacturing countries or concentrated on the domestic market.

Hence by 2009, the industry's workforce reduced to 150,000 and the sector's exports too came down to US$ 1.6 billion.

Editor's note-Learning and adopting to live, survive, compete and grow in liberalisation era is a must for all industries.

Fibre2fashion News Desk - India

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