RP eyes new export tack as garment quota ends

The Philippines is adopting a more complementary garments export strategy with its ASEAN neighbors in the advent of a quota-free market.

Garments and Textile Export Board (GTEB) executive director Serafin Juliano said the Philippines has agreed to a planned complementation program for garments with its ASEAN neighbors.

The planned complementation scheme for garments, Juliano explained, would mean that the Philippines, for example, would specialize on design and branding, while another ASEAN neighbor like Indonesia would concentrate on fabric manufacture.

Another ASEAN member like Singapore, Juliano said, would concentrate on logistics, while Malaysia would focus on garments manufacturing.

Juliano said dopting such a complementation scheme, makes the vision of transforming ASEAN into the "Garments Center of the World" more realistic.

The garments quota system ended last year and garments manufacturing countries now have to compete on an equal footing with all other garments-producing countries.

Fortunately for the Philippines the country has been moving toward a more "value-added" niche even though it may experience a loss in market share, Juliano pointed out.

In terms of value the Philippines remains attractive to buyers of quality or value-added garments, he added.

With the Philippines also pursuing Free Trade Agreements (FTA) within the ASEAN region and Japan, Juliano revealed that there is growing investor interest in the country from Taiwan, China and Korea interested in tapping the lucrative Japanese market.

Juliano had earlier projected that even with the end of the quota system, the garments and textile sector would still post a healthy growth of 10 percent this year.

He reiterated that the Philippines is already experiencing a surge in garments orders following the lifting of quota restrictions at the end of 2004.

The majority of the orders or about 60 percent, are for quota restricted categories which were 20 percent overbooked during the quota regime.

The increased orders, Juliano said, is good news for subcontractors.

He urged garments manufacturers to be careful and maintain a low overhead since there has also been a significant decline in prices due to the increased competition.

Juliano said Philippine garments exporters are now able to save on their cost due to the reduced documentation and processing, as well as the elimination of the additional cost of acquiring quotas.

Under the quota regime, garments exporters had to secure quota allocation and various export documents and licenses.

With the abolition of the quota, such documents are no longer required.