This women's T-shirt from Fashion Textile 21 comes in 60:40 cotton-polyester.

Foreign revenue is mainly propelled by the US and the EU as these economies steadily shed the effects of the financial slowdown.

The garments industry in the Philippines is benefitting from the resurgence of orders in key markets in light of the improving business climate in the West.

Although outbound shipments fell in 2009 due to the global economic crisis, exports have been steadily rising over the past three years and are expected to continue an upward trend. Data from the Department of Trade and Industry show that overseas revenue in 2012 grew 15 percent to $1.5 billion from the period before. This was after the line posted a 12 percent jump in 2011. For 2013, income from clothing is expected to expand by as much as 7 percent.

The growth is primarily driven by renewed interest from the US, which accounted for approximately 69 percent of exports last year. Shipments totaled $514.9 million from January to May this year, up 2 percent from the same period last year. The Philippines has been lobbying for the passage of the Save Our Industries Act, a US bill providing duty-free or preferential access to imported garments that adopt US-made fabrics. The enactment of the proposed law, which was first introduced in the US Congress in 2009, is projected to boost total exports between $2.7 and $3 billion by 2017. It is also expected to generate 450,000 jobs in the sector over the next five years.

The Philippines continues to attract buyers from the US. Gap, Ann Taylor, Polo Ralph Lauren, Victoria’s Secret, Tommy Hilfiger, Levi’s and Jones New York have been boosting their sourcing activities in the country over the past years. The development is attributed to the quality of labor in the country, which is visible in high-value items.

Locally made clothing is also gaining strong interest in the EU, which absorbed about 18 percent of shipments last year. The majority of buyers in the association are based in France, the Netherlands, the UK and Italy. The Philippines is seeking to avail the bloc’s Generalized Scheme of Preferences Plus, an arrangement that will allow countries to enjoy further tariff reductions in various product categories, including garments and textiles. The two sides have also started negotiations for a free-trade deal.

Competitive advantages

Crismer Inc. produces this sleeveless dress for girls. It is made of polyester and shantung and features an organza sash.

One of the industry’s strongest suits is the widespread availability of skilled manpower across the archipelago. Aside from being proficient in different manufacturing steps such as weaving and sewing, workers in the Philippines are known for their good English literacy. They can also operate computers and large-scale machines.

Foreign investors are attracted to the strict adherence to ethical and labor standards of factories in the country. A number of major fashion brands have pulled out from Bangladesh, the world’s second-biggest clothing exporter, in the wake of the controversy surrounding the safety of garment workers there. China is also being criticized due to the alleged presence of sweatshops.

The availability of indigenous materials such as Manila hemp, ramie and bamboo is another advantage enjoyed by the sector. Manila hemp is mixed with cotton or polyester to create denim fabric, while ramie is used as an alternative to linen. Apparel made of these fibers is gaining popularity among overseas buyers because they are perceived as sustainable.

The sector receives ample support from various trade associations. The Confederation of Garment Exporters in the Philippines and Garment Business Association of the Philippines regularly conduct seminars and training to support its members. They also lobby for laws and policies that will benefit the line.

This article and its contents are provided by the Hinrich Foundation, a partner of Global Sources in promoting trade across Asia. The products and the suppliers featured in this article are export assistance program beneficiaries of the Hinrich Foundation.