RP garment exporters see renewed hope in US legislation

MANILA, Philippines - The Philippine government is certain that the US Congress will pass the Save Our Industries Act of 2009 which will allow local garment manufacturers to import and use US textiles for reshipment to the US as finished product.

In a speech before the delegates of the Qing Yuan- Manila Business Conference Thursday evening at the Mandarin Hotel, Trade Assistant Secretary Fe Agoncillo-Reyes said that the passage of the Save Act 2009 is only a matter of time.

When enacted into law, House Resolution 3039 or the Save Our Industries Act would allow Philippine garment manufacturers to import and use US textiles for duty-free reshipment to the US as finished garments under the cut-and-sew concept. The US normally slapped a 30- percent to 40-percent tariff on garment products.

In the same conference, Luen Thai chief executive Henry Tan said they are ready to double their multi-million peso investment here in the country.

Currently, Luen Thai has three manufacturing facilities located in Clark, Camp Olivas in San Fernando and Cebu.

“We will double our size in the Philippines,” Tan told reporters. This translates to 5,000 to 6,000 new jobs for Filipinos. Tan said they have a total of 3,000 employees in their Luzon operations and 2,000 in Cebu.

“We can easily expand in the Philippines because it is cost effective here,” Tan said. Once the bill is passed, Tan said they can cater to the second layer of garment brands like JC Peney and Sears.

Their Luzon plant produces 90 million pieces per year and supplies T-shirts and other garments to Ralph Lauren, Dillards and Victoria Secret to name a few. Their Cebu plant on the other hand manufactures sports wear for Adidas.

In terms of revenues, Tan said they earn anywhere between $40 million and $50 million yearly. Once the US approves the bill, he said this number will also double.

Tan stressed that there is really a need to push for this bill because the wages in other countries like Bangladesh are very low when compared to the Philippines.

Luen Thai’s Philippines plant is their second largest operations in the world after China. Tan said that the Philippines is the second biggest producer of garments.

“The industry is solidly behind the bill. There is a good chance that it will be passed this year or early part of next year,” Tan said.