The textile and the garment industry in the Philippines is hoping the free trade deal with the United States will revive its struggling businesses.
The fact that the US is now focusing on bilateral free trade agreements instead of multilateral deals has made the Philippines optimistic.

The US is one of the Philippines’ oldest allies. At one time the Philippines used to be one of the biggest exporters of garments to the US. The industry used to be very competitive in its exports and was even considered a sunrise industry during the 90s.

Export performance, however, dropped since the abolition of textile quotas by the World Trade Organization in 2005. As a result, garment and textile enterprises in the Philippines which relied on quotas underwent difficulties leading to closure of factories and downsizing.

Garments might be eventually included under the US Generalized System of Preferences (GSP), a trade arrangement that allows market access for numerous Philippine exports. This will have to come after the inclusion of footwear in the US GSP.

However wrapping up an FTA might take years. In the meantime, textile and garment companies have been granted incentives such as an income tax holiday on preferred kinds of businesses that help reach inclusive growth.