Exports of garments, textile and apparel are seen growing by measly 2 percent to around $1.33 billion starting in the middle of 2024 as industry players expand into new markets to boost revenues.
Robert Young, president of Foreign Buyers Association of the Philippines (FOBAP) and trustee for the textile, yarn and fabric sector of the Philippine Exporters Confederation Inc., said that 2024 will “not be an easy year” for the sector amid Russia’s invasion of Ukraine and the Israel-Hamas war causing disturbances in the supply chain.
Young said they are now looking for other markets that can be tapped aside from the current export markets which include the United States, Canada, European Union (EU) and Association of Southeast Asian Nations (ASEAN).
“So we are now looking for some other countries in South America and in the Middle East, we are now talking to them which somehow can add up to our production quantity,” he said. “We are already in the process of receiving orders from the new markets and the usual markets, they are still there. However, (these are) not as big as last year.”
Young sees high demand for basic wearables and fast fashion or high-end garments next year.
He said the achievement of 2-percent export growth by the middle of next year also hinges on government initiatives on establishing more free trade agreements (FTAs) with other countries, and a remedy to reduce power cost in the country or provision of energy subsidy especially in the export sector.
“Our free on board price is 15 percent higher than the ASEAN competitors therefore, it will be not an easy task for us in getting the appropriate quantity for our production,” he said.
Young said more FTAs and lower or subsidized power costs can somehow ease up production costs.
He also particularly cited the looming extension of the EU’s Generalized Scheme of Preferences Plus (GSP+) boosting the sector’s revenues.
“As far as productivity is concerned, we are ready and we have ample laborers as of now. This is due to lesser production orders,” he added.
Young also expressed hope that the labor cost will be maintained amid the proposed P150 legislated wage hike, which he said “for sure will again deter our plan or our projection to increase the export revenue in the midyear (of 2024).”
Source: PHILEXPORT News and Features
December 27, 2023
