Clothing Trade can be a Top Dollar Earner

The manufacture of garments, or so called ready-to-wear apparel, for export is also the second leading dollar earner for the economy. It has been adding about $3 billion annually to the country’s foreign exchange reserves. But it has the potential to boost its dollar earning capacity to double its present volume in the next ten years or in the next few decades.
The Philippines used to be one of the ten leading suppliers of RTW apparel to the world’s importing countries, including the U.S., where over half of total exports and as much as 70 percent of the total exports was absorbed by the American market.

The entry of China and other big Asian exporters like Indonesia and Bangladesh, however, has left the Philippines behind its neighbors as leading Asian supplier for some time.

China’s and the other Asian suppliers edge over the Philippines is their lower cost labor. The Philippines has remained competitive in higher priced categories or quality garments, especially in the European Union, this country’s second biggest market.

The country’s RTW apparel industry, however, can be more competitive price-wise through a re-development program designed to cut production cost, including labor. This calls for the establishment of new garment production plants or shops in the countryside instead of in big urban areas like Metro Manila or around the capital region where most of the big clothing makers have been based until recently. If the new clothing-making plants could be established in more remote provinces were labor costs are much lower than in or around the capital region, production costs could b cut to more nearly competitive levels.

The GMA administration is likely to be reproducing its efforts toward attaining its objectives toward expanding the industry in the countryside not only to make the RTW apparel industry competitive on the export market but toward creating more jobs for the country’s fast growing labor force. GMA’s first major concern when she joined the government as head of the Garment and Textile Export Board. And, for the first time, according to an announcement when she was already elevated to the office of the President in 2001, the garment and textile industry hit the export target of $3 billion in export earnings.

The industry could at least double its foreign exchange earnings in a decade if a countryside program of development could be pushed through the next few years and operating costs of the industry could be reduced to competitive levels.