Garment manufacturers are in a dire strait as they implement continuing “retrenchment of workers”  following a pullout by a major buyer and punishing global economic slowdown, hitting mostly garment factories in Mactan, Cebu, an industry group said. 

Maritess Jocson-Agoncillo, executive director of the Confederation of Wearable Exporters of the Philippines (Conwep), said that garment manufacturers continue to scale down even after the pandemic on an ensuing weak global market.

When asked about the overall industry performance, Jocson-Agoncillo described is as “bad” adding, “we have a double digit - negative growth at the start of 2023 and have not recovered due to soft global demand for apparel shoes and bags and constituting wage increases every year since 2021.”

“Markets have been soft, investors are consolidating,” she said. She further said though that consolidation is a business decision during hard times. She added that the current situation does not bode well also for the 2024 industry outlook. 

For the January-July period this year, all industry categories suffered declines ranging from a high of 27 percent to a low of four percent. Exports of travel goods experienced the steepest decline with negative 27 percent to $316.167 million from $1.101 billion in the same period last year. 

For instance, exports of apparel alone went down to $489.833 million or 19 percent down from $397.587 million in the same period last year. Exports of textile also slumped by 18 percent to $143.598 million from $541.186 million in the same period in 2022. 

Exports of footwear also decreased by eight percent to $52.934 million in the first seven months this year from $57.591 million in the same period last year. 

In fact, she reported that the Mactan Apparel, a group of seven factories, suffered setbacks since the pandemic. 

Jocson-Agoncillo said that these firms are “trimming off, retrenchment of workers to scale down overhead as they suffered a major buyer pull out this year.“ 

“The trimming down or retrenchment of workers started  happening third and fourth quarters of 2020/2021 /2022. This is the effect of post pandemic and the continuing soft global demand for apparel shoes and bags,” she added. 

By 2021-2022, she said that four factories of the Mactan Apparel group suffered major post pandemic loss, resulting in the merger with only two surviving  factories. 

At the height of their operations, the group employed over 21,000 workers, all operating within the Mactan ecozone under the Philippine Economic Zone Authority (PEZA). 

The Mactan Apparel group now consists of five factories and currently employ 14,000 to 15,000 workers.