Garment exporters seek return to OTC system in allocation of quotas

A group of garment exporters is advocating a return to the over-the-counter system of allocating export quotas, saying the current system favors foreign-owned and big local companies at the expense of small and medium-sized garment firms.

The allocation of garment export quota is handled by the Garments and Textile Export Board (GTEB) which is headed by Felicitas Reyes as director. The GTEB is also tasked to oversee the implementation of bilateral trade agreements between importing countries and the Philippines.

At present, the GTEB distributes export quota allocations through a bidding process which some local garment exporters describe as "lacking in transparency."

Among those who are advocating a return to over-the-counter allocation is Jimmy Cheng, owner and president of a garments factory in Valenzuela which closed shop in 1998.

"I was a victim of irregularities at the GTEB. How could I deliver my products if somebody I do not know was getting my export quota allocation," Cheng said.

Sammy Chou, president of United Hongkong Garments factory in EPZA in Bataan, said he was planning to relocate his plant to either in Vietnam or in Thailand "If the air on the controversial export quota allocation system being implemented at present by GTEB is not cleared soon."

He said he favors the return of the "over-the-counter" system implemented before by GTEB.

The scheme, he said, prevents quota holders with no orders to peddle their quotas in the market.

As of last year, there were 1,387 garments manufacturers and exporters in the country. Of the total, 66 percent are small companies with annual exports of less than $1 million, while 23 percent are medium enterprises with exports of less than $5 million.

The remaining 11 percent are considered big firms with exports of between $5 million and $30 million.