Deep job cuts hit garment sector

Published September 8, 2020, 5:00 AM

by Bernie Cahiles-Magkilat

The labor-intensive garment and apparel manufacturing industry is cutting jobs across all companies following a 50 percent decline in exports in the global market, particularly the US.

Maritess Jocson-Agoncillo, executive director of the Confederation of Wearable Exporters of the Philippines (CONWEP), said at least 21,518 garment and apparel workers are going to lose jobs starting last June up to end this year. Some small companies that were not CONWEP members had started laying off since April this year.

“You cannot squeeze blood from a stone,” said Agoncillo. Already, 20 percent of its CONWEP’s 112,000 workers would be furloughed or retrenched. The entire garment industry employs 260,000 to 280,000 workers of which 112,000 are from CONWEP with most members coming from Regions 3, 4 and 7. The number of workers affected was based on its May survey, another survey is going to be conducted in October to assess the situation.

Agoncillo said they have already informed the Department of Trade and Industry and the Department of Labor and Employment in May about their predicament. Hence, the DOLE is extending help to workers under the Bayanihan 2.

They expressed hope that exports will recover and orders for spring and summer will start to come in. “This is the time when some companies are finishing up their workers for the fall and winter, but this is also the time that buyers start ordering for spring and summer 2021, but orders are not there,” she said.

Already, the entire country’s domestic garment exports to the global market is down by 50 percent from January to May at $192 million from $377 million in the same period last year. In the case of CONWEP, its exports reached only $157 million as of May from $234 million same period last year. The US accounts for 50 percent of the Philippines total garment exports. The US market though has been bogged down not just by the pandemic but also by the upcoming mid-term elections.

“This is really a good indicator that there must be a retrenchment,” she added.

She, however, denied that some CONWEP members are closing operations permanently but admitted that retrenchments are happening across member firms.

“Some companies have gone into repurpose and were able to save some  jobs, but there are some CONWEP members like those in shoes and bags that cannot just repurpose to manufacture face masks and personal protective equipment because not anyone can spend $3 million to $4 million to get into a clean room set up for a repurpose firm,” she explained.

In addition, most of CONWEP members are big companies and are footloose, meaning they have operations all over. Because of the pandemic and the long lockdowns, some of them may just have shifted their production to other countries like Vietnam and Cambodia with less stringent lockdown and quarantine restrictions.

Of the 4,000 garment workers that were reportedly retrenched from Sports City, including Yuen Thai of the leading Luen Thai Group, in Mactan Export Processing Zone, Agoncillo said they are not shutting down operations. The MEPZ Administrator flew in today to Manila to report to Philippine Economic Zone Authority Director-General Charito Plaza of the zone’s labor retrenchment issue.

But Agoncillo denied reports that retrenched workers were not given advanced notice. The garment manufacturing sector is one of the most unionized industries in the country.

“That is not true, Sports City has very good legal advice so they would go by the book they know that,” said Agoncillo. Sports City reportedly retrenched 4,000 workers. Under the law, she said, a one month salary for every year of service is given as separation pay but if the company is losing it is only half a month.

Agoncillo, who likened the industry situation in 2006 or the year after the abolition of the garment quota, said, “We live by the day.”