By Bernie Cahiles-Magkilat
The garment manufacturing industry is running out of good factories to produce apparel as more orders intended for China have been diverted to the Philippines as a result of the trade ware between the US and China, according to the Foreign Buyers Association of the Philippines (FOBAP).
FOBAP President Robert Young said the outlook for garment exports in the near future has become “very rosy because we have non-stop inquiries from buyers in the past two months as orders have been shifted here from China because of trade war but it is not for us to boast because it is difficult to find factories.”
FOBAP expects garment exports to at least maintain last year’s level of $1.3 billion- $1.5 billion this year. But Young said this bright prospect has been met with the lack of garment producers which can comply with the requirements of these big companies. These include compliance of labor, child labor, good working condition, including waste management.
“Our buyers require that factories comply with these rules, but every time they come here to audit, our factories have been found non-compliant,” said Young adding some 20 factories failed in just one audit.
The compliant garment firms are those located inside the economic zones but they are very few. There are 15-20 big garment manufacturers with 1,000 pieces production a day. Chinese garment firms are now investing in Bataan as they bring in their orders to avoid the high tariff imposed by the US on China-manufactured garments.
“We have talked to about a 12 Chinese garment firms that they will be renting factories in Bataan,” he said.
Aside from non-compliant garment firms, Young said that the proposed TRABAHO Bill is causing some garment manufacturers jittery. He cited of one big-time garment producer which is selling to a Chinese company because of the pending overhaul of the country’s incentives regime to investors.
“These are old timers, these are big ones that we should take care of. We should not lose them,” he added.
FOBAP used to import $3 billion worth of garments, furniture, giftware, bags. This has gone down to $1.3 billion to $1.5 billion last year.