PH loses out to neighbors over big garment order

MANILA  -A major European garment brand has withdrawn its multi-million dollar orders from Philippine producers, a blow to local exporters already hit by poor sales.

Maritess Jocson-Agoncillo, executive director of the Confederation of Wearable Exporters of the Philippines (Conwep), said the major brand, which she did not name, had diverted the orders to Vietnam and Cambodia, where goods are cheaper given their lower wages.

“A major European brand pulled out its orders and it’s affecting us. I have right now about 4,800 to 6000 workers … affected,” Jocson-Agoncillo told reporters on Tuesday.

The pullout also meant the country losing out to competition for $200 million to $300 million in revenues a year, she said.

The garment industry’s export revenues were down by 25 percent in the first six months of the year, the Conwep official said, noting that the declines were seen across all product groups such as apparel, travel goods and footwear.

“We just had a recent wage hike. (And) there’s another one coming our way,” she said. The country pays a minimum wage of $8, while neighbors pay $6-$7.

The Foreign Buyers Association of the Philippines (Fobap) also told the Inquirer their export revenues were down during the same period by 15 percent to 20 percent, largely due to a downturn in the US market. Fobap is a trade group whose members account for about $1.5 billion worth of garments garment exports and $300 million worth of hard goods annually.

Inflation and recession talks make for “a good recipe for people to be wary and stop buying and the most affected is the fast fashion business, being non-essentials,” he added.