Though the Comprehensive and Progressive Agreement for a Trans-Pacific Partnership (CPTPP), may boost Philippines’ garment sector, it may eventually drive investors away from the country, believes Robert Young, President, Foreign Buyers Association of the Philippines (FOBAP) As per a Phil Star Global report, from $1.09 billion in 2016, Philippines’ garment exports slipped y on an average 12.6 cent to $642.67 million in 2020 due to lack of backup industries in the country.

Philippines imports all raw materials including textile and buttons from abroad. Its fabrics are imported from South Korea, China, Vietnam. Young says, this increases its cost of garment-making which is 20 per cent more expensive than in Vietnam.

Consider local limitations

In such a situation, if Philippines is forced to sign the CPTPP, it may face direct competition from Vietnam, forcing investors to relocate to other countries, says Young. The country first needs to consider the limitations of local manufacturers who are yet to move beyond fast fashion to cater to the demands of international buyers, he adds.

The government also needs to focus on reviving the $1 billion garment exports to traditional markets such as United States, Japan and South Korea, Young adds.

Focus on export quality

Rene Ofreneo, Professor-Labor and Industrial Relations, University of the Philippines, urges the government to improve the quality of exports. This will help local players capture more orders for high value apparels, he adds. They should also aim to develop a niche product to capture the global apparel market.

Though Philippines invested nearly $35 million or P1.7 billion to transform facilities to PPE making during the pandemic, it received only 14 per cent or less than P700 million, of the P4.8 billion contracts placed by the government. The government therefore, needs to boost domestic as well as export markets before entering new trade agreements.