The Philippines is aiming at a free trade agreement with Turkey. The aim is to help revive the garment industry and take advantage of Turkey’s weak currency. The Turkish lira has suffered a major beating following the country’s trade standoff with the United States. The Philippines sees this is an opportunity for garment manufacturers because Turkish textiles have become more price competitive with the depreciation of the exchange rate.
The free trade agreement could introduce a zero-tariff regime. Rates are between 10 and 20 per cent currently. Since the abolition of textile quotas by the World Trade Organization in 2005, garment and textile enterprises in the Philippines which relied on quotas faced difficulties leading to closure of factories and downsizing.
Spinners, who turn raw material to yarn then to fabrics for garment factories, have dropped in numbers. Out of more than 30 spinner companies, only two have remained. At present, 39 per cent of the industry is composed of exporters, and 61 per cent is subcontractors, which include small contractors catering to garment exporters, or backyard businesses.
The industry is gearing up to jumpstart its resurgence and gain back its reputation as a competitive player in the domestic and international markets.