Philippines’ apparel exports dropped four per cent from January to July in 2019 compared to the same period a year ago. Last year, apparel exports had dropped 16 per cent after flat growth the year before.

The expected transfer of manufacturing sites to the Philippines as a result of the trade war has not happened. Companies looking for alternative manufacturing sites tend to choose Myanmar over the Philippines. Companies are setting up shop in parts of Southeast Asia instead of China to avoid being a casualty of the growing tensions. A bill is seeking to lower the corporate income tax, which is currently one of the highest in Southeast Asia. But it has drawn a lot of criticism because it will also mean the rationalization of tax incentives, which is expected to lead to job losses after companies fail to cope with the rising cost of doing business. Over 1,10,00 workers — in apparel, textile, travel goods, and footwear industries — will be displaced in 12 to 18 months once the bill is passed. However, these workers are paid more than their counterparts in southeast Asia.

Cushioning the impact of the high cost of doing business in the country are the current tax incentives.