GTEB gears up for end of quota system in 2005

The Garments and Textile Export Board (GTEB) is gearing up for the end of the quota system on Jan. 1, 2005.

Trade and Industry Secretary Manuel A. Roxas II, said the GTEB, one of the attached agencies of the Department of Trade and Industry (DTI), is now promoting garment exports to Europe to reduce dependence on the US market.

At present, about 75 percent of the Philippines’ garment exports go to the US, where it has enjoyed quota over the years.

Roxas said the GTEB is also planning to increase garment exports from $3 billion in 2002 to $5 billion by 2010.

Toward this direction, he said, the GTEB under Executive Director Felicitas R. Agoncillo-Reyes has set up PROMI, a pro-Filipino design and merchandising initiative that aims to promote the Philippines as a one-stop sourcing center.

The GTEB has also signed more than 41 international conventions on labor standards.

Other steps undertaken by the agency in support of garment exports were the following:

• Reorientation, rationalization and full transparency of GTEB rules, regulations and policies (especially quota policy). The exercise of discretion of concerned GTEB officials became clearly defined, any deviation became subject to the approval of the executive committee of the GTEB board to truly level the playing field.

• Negotiated in 1998 a four-year extension of the RP-US memorandum of understanding. Previously, the Philippines only got one-year extension.

• Initiated the GTEB System and Operations Audit conducted by SGV to identify problem areas and apply remedial measures with the end in view of streamlining the GTEB documentation process to shorten the turnaround time of documents and reduce red tape.

• Establishment of clear-cut system of document processing and delegation of authority through a manual of operations for effective and efficient delivery of GTEB services.

• Creation of several quota windows (permanent transfer, productivity transfer, etc.) through which the covered garment export quota can be available of by all exporters aligned with the productivity enhancement program. Incentivized the system of allocation of the free quota to encourage firms to improve their facilities and capacities. The creation of these windows helped eliminate third-party shipments, unauthorized quota transfer and other quota-related anomalies.

• Conceptualized and implemented a strategic approach to intensify market/product promotions through trade fair participation, selling missions and sales blitzes where firm commitments of CEOs or top foreign buyers were obtained to increase garment exports.

• Development of the P300-million GTEB transformation assistance package in close coordination with the industry transformation team, elected by members of the garment export industry. In addition, negotiated with Tidcorp for a loan facility exclusive for the garment industry amounting to an initial P1 billion to be raised up to P50 billion.

• The assistance package also includes a substantial lowering of administrative fees that will save the industry about P200 million.