Prospects for the Textile and Garment Industry in the Philippines

  • ID: 363760
  • Report
  • Region: Philippines
  • 32 Pages
  • Textiles Intelligence Ltd.
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The textile and garment sector in the Philippines is a vital part of the country’s economy. It has 320,000 employees, making it the largest employer in the manufacturing sector with 11% of the national total.

An additional 700,000 people are employed as home-workers and small sub-contractors.

The industry expanded rapidly during the 1960s and 1970s but has recently experienced a decline. This has been due mainly to tougher conditions in export markets and a failure to invest in new manufacturing technology.

Exports have been a key driver of growth in the past. The country used to be one of the largest sources of imported garments for the major markets of North America and Western Europe when exports from its major competitors were held back by quotas. However, the arrival of a new world trade regime at the beginning of 2005 has caused serious damage to the country’s international competitiveness. As a result, China and other Asian countries are capturing an increasing share of these markets. Even so, in 2005 the textile and garment sector was the Philippines’ second largest source of export earnings with a 6.2% share, although this was down sharply from 10% in 1997.

There is an urgent need for the industry to restructure into larger manufacturing units, and to re-equip itself with modern high-tech machinery in order to secure greater economies of scale, higher productivity and an improvement in its competitiveness. On an encouraging note, there has been a substantial increase in foreign investment in the past five years. Much of this has come from other Asian producers who, more and more, are regarding the Philippines as an attractive location for textile and garment activities. Research and investment is also going into the development of indigenous fibres—such as abaca, banana, pineapple and silk—in order to ease the country’s serious lack of locally sourced raw materials.
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SUMMARY
DEVELOPMENT OF THE TEXTILE AND GARMENT INDUSTRY
IMPORTANCE TO THE ECONOMY
GEOGRAPHICAL, POLITICAL AND ECONOMIC PROFILE
GEOGRAPHY
POLITICAL PROFILE
HUMAN RESOURCES
INFRASTRUCTURE
TRANSPORT/COMMUNICATIONS/POWER
Roads
Railways
Airports
Seaports
Electricity
Telecommunications
COST OF SERVICES
Wages
UTILITIES
STRUCTURE OF THE TEXTILE AND GARMENT INDUSTRY
TEXTILES
GARMENTS
PRODUCTS AND MARKETS
PRODUCTS
Raw materials
Garment manufacturing
EXPORT MARKETS
Development of export markets
Leading export markets
Other export markets
Leading export products
IMPORTS
Imports by product
Sources of imports
PRODUCTION TRENDS
TEXTILES
Sources of raw materials
Capacity utilisation
GARMENTS
Production trends
Capacity utilisation
PRODUCTION TECHNOLOGY AND MACHINERY
GOVERNMENT POLICIES AND INVESTMENT INCENTIVES
INVESTMENT INCENTIVES
NON-FISCAL INCENTIVES
FOREIGN INVESTMENTS
COMPETITIVENESS OF THE TEXTILE AND GARMENT INDUSTRY IN THE PHILIPPINES:
STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS
STRENGTHS
WEAKNESSES
OPPORTUNITIES
THREATS
FUTURE PROSPECTS

List of tables
Table 1: Philippines: political and economic profile, 2005
Table 2: Philippines: economic indicators, 2003-05
Table 3: Philippines: average monthly wage rates of workers in selected occupations and selected
industries, 2005
Table 4: Philippines: electricity rates, Sep 2004
Table 5: Philippines: water rates, Sep 2004
Table 6: Philippines: freight rates for cargoes using ocean-going vessels, Sep 2004
Table 7: Philippines: freight rates for export cargoes using domestic vessels, Sep 2004
Table 8: Philippines: freight rates for containerised cargoes of local origin or destination, Sep 2004
Table 9: Philippines: mailing rates, Sep 2004
Table 10: Philippines: textile and clothing exports, 1970-2005
Table 11: Philippines: textile and clothing exports, 1997-2005
Table 12: Philippines: textile and clothing exports by major destination, 2002-05
Table 13: USA: imports of clothing from the Philippines by fibre type and by value, 2004 and 2005
Table 14: USA: imports of clothing from the Philippines by fibre type and by volume, 2004 and 2005
Table 15: Philippines: clothing exports by product, 2003-05
Table 16: Philippines: textile and clothing imports, 2001-05
Table 17: Philippines: indices of textile, clothing and footwear production by value and by volume,
2000-06
Table 18: Philippines: foreign direct investments, 1996-2005
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