Garment exports continue to drop

Dollar earnings from garment exports amounted to $1.092 billion in the first five months of the year, down by 3.62 percent from $1.133 billion recorded in the same period last year.

Garments and Textile Export Board (GTEB) Exective Director Serafin Juliano said the continued decline has slowed down as a result of the expansion in May export figures which posted a growth of 2.78 percent compared to the May 2003 exports.

GTEB figures show that garments and textile sales amounted to $231 million in May this year compared to May 2003’s export of $224 million.

The recovery in May, Juliano said is due to strong apparel demand and rapid sales by branded products.

"Branded products worldwide experience rapid sales as the summer season ends," Juliano said. "Since the growing portfolio of our customer base are global brands, this increased Philippine garments export," he added.

With the recovery in May, Juliano reaffirmed his projection that the sector’s sales this year, will at least be the same last year and a recovery will be recorded by 2005.

Garments and textiles exports for the first five months of the year to quota countries amounted to $962.069 million, still posting a decline of 3.83 percent when compared to the exports posted from January to May last year of $1 billion.

Exports to non-quota countries amounted to $130.766 million, again registering a decline of 2.02 percent compared to the $133.455 million recorded last year.

Juliano cited the fact that there has a strong growth in exports to the European market of 27.17 percent, amounting to $180.151 million and which now accounts for 16.48 percent of total garments exports of the country.

For the same five-month period last year, garments and textiles exports to the European markets amounted to only $141.661 millon, accounting for 12.49 percent of total garments and textiles exports.

The increase in exports to Europe was a move away from the traditional US market whose share of total exports has been trimmed down to 69.13 percent as against 73.34 percent for the same period last year.

Garments and textiles exports to the US from January to May this year amounted to $755.524 million, posting a decline of 9.14 percent.

Juliano meanwhile is not too optimistic that the so-called Istanbul Declaration, which seeks a garments quota extension, will actually achieve its goal.

According to Juliano, based on his consultation with the garments industry, the quota extension movement is merely a private sector initiative that so far has no formal government backing.

Juliano disclosed that there are only 71 global garments industry associations who support the extension and some are amenable to an alternative solution which would involve the use of safeguards against China.

Since the garments quota extension is a global trade issue, any request for changes in garments trade policy must be taken up in the World Trade Organization (WTO) Juliano explained.

"But any matter taken up by the WTO body will require months of negotiations and an agreement must have the consensus of all 147 members," Juliano said.

China, India and Pakistan have already expressed their opposition to a further extension of the garments quota system.

The Philippines had joined 36 other nations in signing the so-called Istanbul Declaration which is asking the WTO to put off for three years or until Dec. 31, 2007, the phase out of the quota garments system because it would give undue advantage to China.