Orders for garment exports are shifting from China to the Philippines. But the garment manufacturing industry in the Philippines doesn’t have enough good factories to meet the demand. There are compliance issues. These include compliance of labor, child labor, good working condition, including waste management.
There are few compliant garment firms. These are 15 to 20 big garment manufacturers with a production capacity of 1000 pieces a day. The Philippines has lost its position as the world’s top garment supplier. China, Bangladesh, Africa and sub-Saharan countries have all overtaken the Philippines.
The country lost 70 per cent of its market over 15 years due to a number of reasons, primarily the removal of the quota system that led buyers to source from other countries offering the same products at half the price.
The Philippines now ranks fifth among Asean countries in garment exports. The country has also lost its efficiency and factories have become outdated especially with the advent of robotics, digital cutting and sewing. The industry needs power and labor subsidies. Reduced incentives to exporters have led some companies to freeze their expansion.
The US accounts for 60 per cent of the Philippines’ garment exports. The rest are sold to the EU and Asian countries.