Underutilized factory capacities
After investing billions of pesos ($35M) to repurpose their manufacturing facilities into assembly lines for the production of medical-grade personal protective equipment (PPEs) needed during this pandemic, local producers are suffering from underutilized capacities as the promised local procurement-bias got sidelined with the influx of cheaper imported competition.
In a statement, members of Coalition of Philippine Manufacturers of the Philippines (CPMP) said they were able to garner from the government procurement process only 27 percent of its monthly capacity for coveralls and gowns (815,000 units) and 69 percent of the monthly mask capacity or around 41.3 million units. According to the statement, they delivered the items purchased by the government in January/February this year.
“Unfortunately, the local supplier’s capacity was not maximized in the overall government procurement set up,” according to a joint statement of CPMP and its parent organization Confederation of Wearable Exporters Coalition of Philippines (CONWEP).
“Clearly, the utilization of existing domestic capacity was marginalized. Locally produced PPEs products are not getting into the market, even if the products are supposedly made available for the sole nationalistic use of the Filipino people,” they said.
According to the groups, this experience manifested a major bottleneck in the supply chain and builds on the critical need to establish a collaboration between government and the local industry.
They cited the cohesive nationwide stockpiling program in other countries such as Thailand, Singapore Taiwan, Japan, the United States, among others.
As such, they urged the Department of Health of Health (DOH) to set up a comprehensive stockpiling sourcing program with the Department of Trade and Industry (DTI), and its partner manufacturers to support the long term sustainability of this emerging sector providing critically needed medical grade PPE and preserving Filipino jobs during the pandemic.
To ensure this is implemented, CONWEP and CPMP requested government’s support on the immediate passing of the Philippine Pandemic Protection Act and Stock Piling Bills pending in both houses.
“We highly recommend for government to establish a cohesive supply chain committee program led by the DOH and DTI to work closely with the local industry in planning and implementing a National PPE Sourcing Plan as part of the Strategic National Stockpile Program,” the groups added.
The committee shall be tasked to draw up the measure of each critical step, plan the logistics, and set up a cohesive procurement and planning program sourcing medical grade PPE produced locally, and supporting local employment.
The local industry shall present and guarantee to government a corresponding National PPE Supply and Delivery Plan to support domestic sourcing under an annual procurement plan.
With the pandemic, the local PPE manufacturers expressed hope to soon arrive with a stronger collaboration effort with government to implement clear, immediate and responsive programs.
They also called for a government policy to support the preferred purchase of locally manufactured (Philippine made) medical grade PPE compliant with international standards directly supports the government’s initiative of job creation and preservation.
Local PPE manufacturers employ an estimated 2,500 to 3,000 workers and could considerably increase once the government’s national PPE requirements are exclusively sourced from the local medical-grade PPE manufacturers.
Aside from local job creation, the local PPE producers stressed that procurement from local manufacturers also assures government of accountability on the side of the manufacturers who should not cut corners as the product being produced is aimed to save lives, and not compromise the same. But sourcing from other countries, particularly from unscrupulous foreign suppliers of PPE, has unfortunately heightened the vulnerability of flooding the local market with substandard products.
In terms of pricing, the group said their counterpart foreign suppliers are driving down the price of PPEs at 36 percent less than normal value of a standard, medical grade face mask, to cite an example.
“Once this type of product enters the boarders of the country, the barrier to protect the country from unsafe PPE is now compromised,” the group warned.
It could be recalled that the CPMP founding members responded to the patriotic call of the DTI and agreed to retool their factories and poured in $35 million worth of initial investments to produce PPEs, which are still in short supply during the early 2020.
This also guaranteed the retention of 7,450 jobs to manufacture a minimum guaranteed capacity of 3 million pieces of gowns/ coveralls per month, 60 million pieces of masks/month, 10 M units /month of PPE accessories such as head/foot covers and aprons.
By the 3rd quarter of 2020, the CPMP was ready to supply the country’s requirement with an annual aggregate capacity of 720 million units of masks, 36 million units of medical grade coveralls and isolation gowns and 120 million units of PPE related accessory covers.