The Philippine Garments and Textile Industry

Industry Brief

Industry Structure

Number of Establishments

Presently, the Philippine garments industry is made up of exporters (around 39%) and subcontractors
(61%) which include homeworkers and small contractors to garment exporters.

Data from the Bureau of Labor and Employment Statistics (BLES) show that as of 2010, the number of
textile and garment companies in the country is at 302 and 989, respectively.

Employment

Arangkada Philippines 2010 indicates that in 1995, employment in the sector reached 850,000.
However, after the expiration of the MFA in 2005, employment figures dropped significantly, with an
estimated job loss for 150,000 workers. Still, the sector has been consistently considered as a top
employer, contributing 20% to 30% of employment in the manufacturing sector.

Employment Figures
Year Garments Textiles
2009 411,000 149,000
2010 435,000 144,000
2011 424,000 162,000
2012 441,000 148,000
2013 461,000 152,000
2014 442,000 137,000
Source: Philippine Statistics Authority (PSA) – Bureau of Labor and Employment Statistics

Bulk of the garments enterprises are in NCR, Region IVA and Region III.

Tariff Protection

In general, textile imports are imposed an MFN rate of 7% to 10% tariff while garment articles are
imposed MFN rate of 15% tariff. Under the various FTAs, duty on most of the textile and garment
articles is already pegged at 0%.
Trade Performance

2010 2011 2012 2013 2014 2015

Exports
Garments 1,043,364,524 1,357,896,081 1,322,509,064 1,456,873,914 1,759,028,579 1,357,732,950
Textile 157,289,767 161,882,954 143,703,608 172,128,179 211,024,715 171,286,036
Imports
Garments 93,062,935 169,311,484 185,674,799 225,352,107 28,1682,188 333,682,228
Textile 556,416,206 803,864,807 668,339,380 733,664,572 791,489,297 849,530,076
Source: Philippine Statistics Authority (PSA), as processed by DTI-EMB, as of 1 April 2016 (in FOB Value in US$)
Note: Decrease in exports is due to port congestion.

Since the mid-1990s, the garment sector has steadily and continuously declined, although it has
remained the second highest foreign exchange earner next to the electronics sector. The Arangkada
reports that share of garments and textiles exports has been decreasing and is currently less than 5% of
total Philippine merchandise exports. The value of exports also decreased significantly in the last five
years hitting a low of US$ 1.043B in 2010 from an annual average of US$ 2.4B between 1995 and 2006.
Over the past three years, exports averaged at US$1.5 billion.

For 2014, the major markets (top 5) for garments are the United States, Japan, Germany, South Korea,
and Canada accounting for approximately 83% of total garment exports. For textiles – Japan, USA,
China, South Korea, and Thailand which is approximately 63% of total textiles exports.

Exports of Garments to Major Markets

2015
Country 2010 2011 2012 2013 2014
(Jan-Sept)
USA 827,294,412 1,005,838,564 914,022,801 962,944,963 1,163,938,624 794,409,957
Japan 16,579,967 48,757,349 63,314,678 100,415,052 91,698,624 49,532,934
Germany 19,254,657 21,185,233 47,353,650 54,336,942 74,149,042 36,113,972
South Korea 13,828,726 21,742,102 32,039,316 49,115,032 44,710,184 40,248,527
Canada 23,553,334 30,129,575 37,980,122 45,663,295 76,843,130 47,610,071
Source: Philippine Statistics Authority (PSA), as processed by DTI-EMB, as of 12 Jan. 2016 (in FOB Value in US$)

Garments and Textiles Industry Brief (as of 28 January 2016) Page 2 of 5 pages
Exports of Textiles to Major Markets
2015
Country 2010 2011 2012 2013 2014
(Jan-Sept)
Japan 27,483,393 36,993,409 26,010,535 38,625,023 35,834,250 30,394,831
USA 29,421,270 21,178,390 22,521,354 35,070,785 44,660,354 18,854,510
China 16,408,143 15,465,542 12,901,071 14,917,417 17,624,726 13,225,112
South Korea 3,447,110 6,769,384 7,847,966 10,746,822 23,840,010 15,083,454
Thailand 7,772,410 10,167,520 17,092,402 8,619,131 10,091,116 4,357,133
Source: Philippine Statistics Authority (PSA), as processed by DTI-EMB, as of 12 Jan. 2016 (in FOB Value in US$)

Efforts have been made to increase exports to the United States — mostly by way of the Save Our
Industries Act (SAVE Act), which was first introduced in the U.S. Congress in 2009 and again in 2011 to
expand textile and apparel trade between the United States and the Philippines by eliminating certain
duties on apparel products made in the Philippines using U.S. fabric. The bill — considered to be "the
best hope for the Philippine garments industry as we work towards its revitalization, targeting US$1
billion in incremental investments, US$3 billion in apparel exports and 600,000 jobs," according to the
Confederation of Garment Exporters of the Philippines — did not reach a vote in Congress's 112th
session, which adjourned in January 2013. The Department of Trade and Industry (DTI) has decided to
set aside plans to file for the third time its proposed garments bill in the US Congress until such time that
the domestic and international distractions (e.g., Syria crisis) faced by the Obama administration have
subsided.

In addition to efforts to increase its textile and apparel exports to the United States, the Philippines will
take advantage of the European Union (EU) for Generalized System of Preferences Plus (GSP+) — which
provides for reduced tariffs or duty-free entry of eligible products exported by the Philippines to the EU.

Imports of garments and textiles have continuously increased for the past five (5) years. Top suppliers
of garments would include China, Hongkong, Spain, Vietnam, and Thailand which comprised
approximately 79% of the total imports for 2013. Suppliers of textiles would be from China, South
Korea, Taiwan, Hongkong, and Japan which is approximately 78% of total imports of textiles for the
same year.

Imports of Garments from Major Suppliers

2015
Country 2010 2011 2012 2013 2014
(Jan-Sept)
China 31,638,765 71,777,753 62,250,605 96,122,916 118,965,722 115,439,616
Hongkong 12,988,000 25,893,368 32,086,328 38,344,832 53,198,952 40,915,088
Spain 19,715,039 23,516,469 30,473,956 24,328,148 20,615,707 8,547,109
Vietnam 3,053,574 4,926,559 7,602,969 9,987,611 11,040,969 13,213,283
Thailand 6,911,929 9,137,872 10,933,262 9,360,289 8,983,285 8,496,232
Source: Philippine Statistics Authority (PSA), as processed by DTI-EMB, as of 12 Jan. 2016 (in FOB Value in US$)

Imports of Textiles from Major Suppliers

2015
Country 2010 2011 2012 2013 2014
(Jan-Sept)
China 162,148,695 289,963,532 239,085,546 288,614,681 309,839,023 251,602,238
South Korea 74,058,499 126,865,920 122,157,615 138,584,502 150,959,500 118,883,061
Taiwan 62,239,601 78,632,969 70,737,040 62,220,142 62,152,830 46,098,316
Hongkong 63,787,746 67,903,283 46,430,146 48,223,746 56,834,658 56,049,634
Japan 20,703,772 38,242,521 34,833,834 33,132,998 31,716,397 16,674,695
Source: Philippine Statistics Authority (PSA), as processed by DTI-EMB, as of 12 Jan. 2016 (in FOB Value in US$)

Garments and Textiles Industry Brief (as of 28 January 2016) Page 3 of 5 pages
Revitalizing the Garments and Textile Sector

With the industry’s aim of recapturing the previous highs of the industry in terms of level of production,
exports, and employment generation, interventions are expected to result to substantial increase in
investments through market access development programs (US, EU, Japan) and increase in the sector’s
value added by addressing missing gaps in the supply chain, and creating linkages.

Under the Philippine Development Plan 2011-2016, the government is mandated to formulate a
comprehensive national industrial strategy that shall spell out opportunities, coordinate and promote
the growth of forward and backward linkages in priority areas and high-potential growth sectors, and
prepare other industries to attract investments and generate jobs.

The DTI-BOI 2012 Strategic Industry Development Program, launched on January 30, 2012, aims to craft
sectoral roadmaps for various industries to chart long term vision, strategies and goals. Sectoral
roadmaps are crucial for the country to sustain inclusive economic growth to generate meaningful jobs
for our people.

The government has identified the garments and textile as a priority sector for the roadmapping
exercise and the Board of Investments (BOI) has been coordinating with the industry players and other
government agencies on the roadmapping exercise. The industry roadmap for garments and textile is
expected to be completed within 2015.

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Garments and Textile Industry Associations in the Philippines

Garment Business Association of the Philippines (GBAP)

Rm. 1503 Cityland 10 Tower 2
H.V. Dela Costa St., Salcedo Village, Makati City
Phone: (632) 841-0474 / 810-3482
Contact Person: Ms. Margarita Dela Rama - President

Confederation of Garment Exporters of the Philippines (CONGEP)

Unit 15F, 15th Flr. Parkview Tower 2
Eastwood City 118 E. Rodriguez Jr. Avenue
Bagumbayan, Quezon City, Philippines 1110
Telephone: (+632 ) 922-6791 / 584-7514
Contact Person: Ms. Maritess Jocson-Agoncillo – Executive Director

Textile Mills Association of the Philippines (TMAP)

G/F Alexander House, 132 Amorsolo Street
Legaspi Vill., Makati City 1229
Tel. no.: (632) 818-6601; (632) 818-6605
Fax no.: (632) 818-3107
Email: tmap@pacific.net.ph
Contact person: Mr. Claro C. Arriola – President

Foreign Buyers Association of the Philippines (FOBAP)

Unit 1215 Cityland Condominium 10, Tower I
#156 H.V. Dela Costa, Ayala North, Salcedo Village, Makati City
Tel. no.: (632) 892-8492; (632) 753-3029
Fax no.: (632) 893-5126
Email: fobap@i-manila.com.ph
Contact person: Mr. Eliseo Miranda – President

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