Philippines garment exporters seeking SAVE Act
America's Save Our Industries Act, also known as the SAVE Act, which would give a range of Philippines-made apparel duty-free access to the US, looks increasingly likely to be implemented. And the Filipino clothing and textile sector is happy.
The bill, first introduced to the US Congress in 2009, and then re-introduced in 2011, is expected to be re-introduced to Congress again this month.
Maritess Jocson-Agoncillo, executive director of the Confederation of Garment Exporters of the Philippines (CONGEP), told just-style.com that the Philippines industry is hoping that the bill will be reintroduced and will pass Congress this time, following detailed negotiations between the textile and garment industries in the two countries.
These have accelerated since mid-2012, in addition to discussions between relevant government bodies.
"We're looking at a win-win sectoral solution wherein both the US and Philippines will benefit from the agreement," said Ms Jocson-Agoncillo. "The calculations include additional costs such as freight costs and the numbers involved are designed to ensure we reach a reciprocal agreement."
Ms Jocson-Agoncillo said CONGEP, together with the Garment Business Association of the Philippines (GBAP) and the Textile Mills Association of the Philippines (TMAP), has been in close discussion with the industry's US counterparts such as the American Manufacturing Trade Action Coalition (AMTAC), National Council of Textile Organisations (NCTO) and American Apparel and Footwear Association (AAFA).
The SAVE Act would allow duty-free access to the US for garments wholly assembled in the Philippines provided they are made from US fabric, while Philippines apparel produced using American yarn would enter the US at a reduced tariff.
US yarns and fabrics would also be granted duty-free entry to the Philippines, while a number of Philippines cut and sew garment types not produced using US fabric would also be allowed zero-duty access to the US - an area on which much of the discussions have been focused.
Ms Jocson-Agoncillo said if the SAVE Act passes, it would probably be implemented in late 2014 or in early 2015.
She said the Act would give a major boost to the Philippines textile and garment industry, which has suffered during recent years due to low-cost competition from elsewhere in Asia.
Philippines textile and garment exports were around US$1.5bn in 2012, around the same level as in 2011 according to figures from CONGEP. But, exports have declined by 41% since 2005.
CONGEP is forecasting that if the SAVE Act is introduced, clothing and textile exports from the Philippines would grow by 25% to US$2bn over 2014 and 2015, and then by around 30% in 2017 to between US$2.7bn and US$3bn - around the same level exports were at in 2003.
The SAVE Act would help the Philippines reclaim much of the business at the low-to-middle end that it has lost over recent years, as well as maintaining the medium to high end business it now primarily produces, said Ms Jocson-Agoncillo.
She said the product area to benefit the most would be denim, and that the volume of business with Gap and Levi's in this sector could increase dramatically.
"Denim would be the game changer," she said, adding: "We expect that customers sourcing denim who also want items such as blouses would also source these products from the Philippines once again."
CONGEP has discussed the SAVE Act with several key buyers, she said. Victoria's Secret, Jones New York, Ann Taylor, Polo Ralph Lauren, Dillard's and Tommy Hilfiger are among other major brands already sourcing from the Philippines.
Ms Jocson-Agoncillo added CONGEP anticipates that, if the SAVE Act is passed, the Philippines textile and garment industry would gain over US$1bn worth of investment in 2014 and 2015.
It would also expect that around 150 new firms would be established during that time, with a further 250 to be established in 2016 and 2017, bringing the total to around 900.
The industry would employ a further 450,000 workers over the next five years, bringing the total to 600,000, she predicted.
The Philippines is also hoping to gain preferential access to Europe through the European Union's revised Generalised Scheme of Preferences (GSP) coming into force in 2014.
If that happens, along with a Save Act, the proportion of Philippines textiles and garments going to the US and Europe would return to 2003 numbers at between 75-80% to the US and around 15% to Europe, said Ms Jocson-Agoncillo.
In 2012, around 69% of the Philippines' textiles and garments exports went to the US, with around 9% going to Europe, 5% to Japan and 17% to other markets including Australia, New Zealand and the Middle East.
Help test our new apparel sourcing tool.
Former Levi Strauss & Co executive Gary Harvey has been named creative director of upscale denim brand True Religion....
The Walt Disney Company (WDC) is to phase out the sourcing of Disney-branded products from Bangladesh, Belarus, Ecuador, Pakistan and Venezuela over concerns the countries no longer meet its guideline...
Levi Strauss has announced a series of executive appointments at the Levi's brand to help drive innovative product and marketing....
US retailer Limited Brands (now known as L Brands) has raised its full year earnings guidance after it recorded a 24.5% increase in second quarter profit. ...
UK occasion wear retailer Coast has named Kate Bostock, the former head of general merchandise at Marks & Spencer, as its new CEO, tasked with developing the business into an "international omni-chann...
- China leads US apparel sources with falling prices
- US apparel sector braces for potential cost hikes
- Vietnam grows share of US apparel imports in 2016
- Trade Tracker – Trump's first weeks, Brexit agenda
- Key trade issues facing US textiles and apparel
- Bangladesh "high threat" for terrorist activity
- VF Corp sees Q4 and FY earnings tumble
- Sales at US clothing retailers jumped in January
- Ralph Lauren new execs to support Way Forward Plan
- Adidas and Burberry recognised for sustainability
- When Things Go Wrong - A Practical Guide to Managing Common Problems in Apparel Sourcing
- Outdoor performance apparel 2016: A broader perspective
- Technical textile markets: product developments and innovations, December 2016
- Southeast Asia strategic sourcing review – a focus on Cambodia, Vietnam and Myanmar
- Global market review of lingerie – forecasts to 2022