S.S. Ventures International Inc., one of the biggest shoe manufacturers in the country, has taken the lead in submitting a position paper to the Tariff Commission seeking an increase in tariff rates on imported footwear.
In its position paper, S.S. Ventures related that in 1994 the country had six big manufacturing companies producing athletic shoes for such companies as Reebok, Nike, Skecher, L.A. Gear and Sergio Tachini.
The six Philippine companies back then, S.S. Ventures said, provided employment for some 18,000 workers.
Following the Asian economic crisis which started in 1997, Nike, Reebok, Skecher, Sergio Tachini and L.A. Gear decided in 1999 to stop ordering from Philippine shoe manufacturers.
Then in 2000, the Philippine Government decided to lower the tariff duty on imported footwear to 15 percent.
Nike, a major client of SS Ventures, decided to give its orders instead to shoe manufacturers from Thailand, China, Vietnam and Indonesia.
In January this year, the tariff duty on imported footwear was further reduced to 10 percent.
Adidas, another client of S.S. Ventures, has decided to stop ordering from the Philippines and now gets its supplies from other Asian countries.
At present, S.S. Ventures pointed out, only two of the six big shoe manufacturers remain and employment has dropped to just 3,000 workers in the shoe manufacturing industry.
The foreign athletic shoe companies, S.S. Ventures argued, have decided to relocate to other Asian countries which maintain high tariff walls to protect their local shoe manufacturing industry.
China, for instance, maintains a tariff level of 45 percent for imported footwear, while Thailand’s tariff rate is 40 percent.
Vietnam also maintain a high 30-percent tariff wall against imported footwear, while Indonesia pegs its rate at 25 percent.
Because of its high tariff wall, S.S. Ventures pointed out, its shoe industry enjoys an export volume of 10 million pairs a month.
S.S. Ventures is, thus, urging the Tariff Commission to protect the local shoe industry and provide it with a similar tariff protection of 35 percent.