The Philippines wants a trade agreement with Turkey to take advantage of the latter’s weak currency, a top official said.
Trade Undersecretary Ceferino Rodolfo said the Philippines was looking into the possibility of forging a preferential trade agreement (PTA), or reduced tariffs on certain products, in a bid to help revive the local garment industry.
He said this in a forum last week during the first ever Philippine Garment Leather Goods Industries & Fabric Expo.
“We’re looking specifically at possibly sourcing textiles for our garment manufacturers and exporters here,” he said.
He told reporters the idea of a PTA was first brought up in February, when both countries had their first Philippine-Turkey Joint Committee on Economic and Technical Cooperation (JCETC).
He said the Philippines had yet to reach out to Turkey anew.
The Turkish lira has suffered major walloping in recent days following the country’s trade standoff with the United States. While this unfolded into a contagion, albeit what some believe was temporary, countries like the Philippines could take advantage by accessing cheaper import.
“It actually presents an opportunity for our garment manufacturers because suddenly, Turkish textiles have become more price competitive with the depreciation of their exchange rates. These are the types of things that we need to go into and go into fast,” Rodolfo said.
The pact could introduce a zero-tariff regime. Rates are between 10 percent and 20 percent currently.
Officials and representatives of the textile and garment industry said they had been having a hard time competing.
Spinners, which turn raw material to yarn then to fabric for garment factories, have dropped in numbers. Out of more than 30 spinner companies, only two have remained, industry officials said.
The local industry was considered a sunrise industry during the 1990s, according to DTI-attached agency Board of Investments (BOI).
Export performance, however, dropped since the abolition of textile quotas by the World Trade Organization in 2005. Garment and textile enterprises in the Philippines which relied on quotas underwent difficulties leading to closure of factories and downsizing, the BOI said.