Local factories invest $35 M to repurpose factories to PPEs

Published August 13, 2020, 9:00 PM

by Bernie Cahiles-Magkilat

Some $35 million have been invested by manufacturers who have repurposed their factories to produce medical grade COVID-19 personal protective equipment (PPEs), face masks, and coveralls, and saved 7,450 workers, who were supposed to be laid off due to the weakening of the economy. 

 This was reported by the Confederation of Wearable Exporters of the Philippines (CONWEP) and the newly formed Confederation of Philippine Manufacturers on PPEs (CPMP) to Trade and Industry Secretary Ramon M. Lopez in their appeal letter to the legislature to include the manufacturers in the Bayanihan 2 stimulus package.

When the DTI in March this year requested export manufacturing firms from both the garments and electronics industry to repurpose a portion of their factory to produce PPEs such as medical grade N95, N88 masks as well as medical grade seam sealed coveralls, isolation gowns, head and shoe covers, five firms heeded the call. These are Medtecs International Corp. Ltd., EMS Components Assembly Inc.,

Reliance Producers Cooperative, Luen Thai International Group Philippines, Inc., and Tacca Industries Pty Ltd from Australia. These firms also formed the group CPMP.

To date, CPMP has consolidated monthly production capacity of over 57 million pieces of masks and 3 million pieces of coveralls and isolation gowns for the protection of medical frontliners. The CPMP re-purposing initiative saved 7,450 jobs during this pandemic with combined investments of over $35 million during the last 3 months.

“We are proud to announce that all products produced by the CPMP group passed the highest standard requirements. All test certifications were performed by various 3rd party international laboratories testing facilities for PPE, such as Intertek, UL and SGS. All CPMP products are medical-grade and will be produced in FDA-certified local factories with FDA (Philippines) License to Operate clean room facilities,” said CONWEP Executive Director Maritess Jocson Agoncillo and CPMP Executive Director Rosette Carillo.

 To ensure that their manufacturers will not be left out in this government fiscal stimulus package, the groups have proposed some key components in the Bayanihan 2.

First, the groups have asked for exemption from payment of duties, taxes, fees, to include VAT on local sales, for locally manufactured medical grade PPE. This will give ample leverage to emerging sub sector, to level off the playing field.

They also called for strict implementation of the government to qualify and impose FDA and FDA-accredited 3rd party laboratory testing on imported PPEs; and imported PPEs should be imposed with duties, taxes, and other fees, to include VAT on local sales.

The retroactive application of capital equipment exemptions on import duties, and exemption on VAT on local sales (treated as exports) to cover the period from the time RA 11469 expired, should apply to repurposing firms and local manufacturers of medical grade PPE.

The groups proposed that the government, as the procuring entity, shall give priority and procure critical products manufactured, produced or made in the Philippines.

According to the groups, these are necessary to allow the local PPE industry to grow and be sustainable.

“We need to level off the playing field from the influx of substandard PPEs. We commit to producing these medical grade PPE compliant with FDA (Philippines) regulations, certified to have passed by established international testing facilities for PPE, and available at competitive prices that can easily compete against imports,” the group said.

“We would like to request the critical support of government to provide a sustainable environment for this sub sector to grow, an emerging sub sector critical to meet the national need for medical grade PPE during health crisis.”

Lopez has also supported the CONWEP and CPMP recommendations. In a report to President Duterte during the Interagency Task Force for the Management of Emerging Infectious Disease (IATF-EID) Cabinet officials in Davao City, Lopez said that DTI is closely working together with local manufacturers from CONWEP.

“This initiative among our local manufacturers is a Zero to Hero story, as it shows the true essence of Filipino bayanihan as we started from zero production of PPEs to what is now a heroic feat,” Lopez said.

Lopez recalled that when the COVID-19 pandemic started in February, the country had no local manufacturing of PPEs, except for one exporter from Bataan.

From zero, the Philippines is now producing 57.6 million face masks and 3 million coveralls capacity per month with estimated investments of $35 million. This program has also saved 7,450 jobs.

“Similar to situations in war, the DTI and the Board of Investments (BOI) encouraged local manufacturers to repurpose some of their manufacturing capacity into the production of critical weapons to fight the war against COVID-19, such as PPEs and face masks, so that the country can lessen its reliance from imports. At the start of the pandemic, sourcing even from other countries became difficult as other countries prioritized their internal needs for masks and PPEs. Thus, it became necessary to produce at least for our country’s internal requirement and be self-reliant on strategic and critical medical products,” said Lopez.