By Janina C. Lim
THE APPAREL INDUSTRY is hoping boosting exports by 10-20% this year, by exploiting opportunities created by the escalating trade tensions between the United States and China.
“I’m looking at sustained growth. At least 10% to 20% increase with the surge of the trade war. We can get a share of that,” Teresita Jocson-Agoncillo, executive director of the Confederation of Wearables Exporters of the Philippines (CONWEP), said in an interview last week at the Department of Trade and Industry.
The US and China have raised tariffs on their imports from the other country, thereby raising the cost to their consumers.
In the case of the apparel industry, China-based manufacturers may relocate their facilities to countries like the Philippines to escape restrictive tariff rates on China-made goods imposed by the US.
Ms. Jocson-Agoncillo added that country’s labor costs remain competitive in the region, making it a viable site for producing apparel.
Apparel exports amounted to $1.02 billion last year, of which US deliveries accounted for about 70%. The 10-20% forecast would bring 2018 exports to $1.12 billion at the low end to as much as $1.23 billion.
However, the Philippine Statistics Authority estimates that exports of apparel and clothing accessories in the first six months fell 40.6% year-on-year to $411.14 million.
Meanwhile, Ms. Jocson-Agoncillo also revealed that US footwear manufacturers are working to include footwear items under the US generalized system of preference amid plans to set up factories in the Philippines. She said the US footwear companies, which she declined to name, are hoping to invest in the Philippines once the US Congress approves the necessary GSP adjustments.
“When they get the changes they want to GSP, they will manufacture here,” Ms. Jocson-Agoncillo told reporters in Makati City.
She noted the high cost of producing shoes in the United States, where materials for footwear are levied an average duty of around 20% to 25%.
Ms. Jocson-Agoncillo likened the situation to that of the Coach brand, which entered the country in 2011 right after the US Congress included 26 sub-categories of leather goods in the GSP.
The Coach brand is now manufactured by four groups and has since expanded to at least eight factories in the Philippines.