Philippine’s garment exports are expected to register flat growth this year as firms struggle to find alternative sources of raw materials outside China. Nearly all of the country’s apparel production has stopped due to the unavailability of the raw materials.
The crisis triggered by the virus outbreak has forced many factories in the Philippines to shut down. The country needs to find alternative sources for fabric, textile and accessories as there is no trusted domestic manufacturer of these raw materials.
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.
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 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.
