The country’s garment export this year is expected to hit $1.5 billion on favorable headways causing major shift in orders to the Philippines from big producers Vietnam and China.
Robert Young, president of the Foreign Buyers Association of the Philippines, said there is no official 2022 garment exports data yet, but he expects their 2023 projection could be $500,000 more than last year’s actual exports.
The rosy projection for 2023, he said, is driven largely by the lack of production appetite by Vietnam and China to take in smaller volume orders.
“They (Vietnam and China) are geared for bigger quantities due to their robotics and automation systems,” said Young.
The refusal by Vietnam and China to take in small volume orders has shifted orders to the small garment factories in Taytay, Rizal which are operating as part of the informal or the undergound economy benefitting from alleged smuggled Chinese textiles. Small garment factories in Taytay are taking up the smaller orders rejected by China and Vietnam, he said.
“They only ship small quantities, say 2-5 balikbayan boxes ship to small boutique buyers all over the world,” said Young. Since these firms have no export license, Young said, some also ship through couriers.
He estimated that the Taytay underground garment operations, which could easily contribute $50 million export revenues last year.
While the informal garment producers are thriving because of their very competitive pricing, Young said the Philippines is now being tag as “suitcase exporters” discouraging legitimate buyers to come into the country. “Taytay is now called the New Divisoria,” he noted.
Another factor driving the country’s garment exports is the ongoing US campaign of “anything but China.” The campaign is getting its momentum and production is spreading among ASEAN including Philippines, he said.
The third factor, he said, is the political issues in Myanmar that is causing apparel orders being shifted, some of which are now in the Philippines.
In addition, he gave credit to President Marcos working visits and sales blitz overseas as plus factors in increasing Philippine trade.