Local garments exporters expect orders from Chinese buyers reaching as much as $250 million that will generate up to 3,000 jobs this year, as China turns to the Philippines due to its competitive labor rates and initiatives to facilitate exports.
Robert Young, president of the Foreign Buyers Association of the Philippines (FOBAP), bared that the country is experiencing an increase in garment orders amid the tariff conflict between China and the United States.
“This is a price game because it will be like who has the best price, best delivery, best quality,” he said, noting regional rivals have increased their minimum wages, resulting in higher manufacturing costs.
“All buyers will resort to Manila. They will look at Manila due to number one, industrial peace and number two, stable labor rates,” he added.
Young said his group members have already secured $150 million worth of purchase order from their principals in China, and is looking to add $100 million by December.
“Production of five factories all over Metro Manila, Bataan and Clark are ongoing for delivery by end of the year. They are coming in town to finalize the additional $100 million (purchase order); for delivery in February,” he noted.
Young thus expects the group’s garments and hard goods exports reaching about $1 billion this year, bolstered by Chinese purchases of Philippine garments.
Hard goods comprise furniture, handicrafts, home decor and decorative items.
“The reason why all these people are coming in is because they can see we are putting in place all the necessary steps to promote export and to make export move faster. This is the key to the promotion, upliftment of the export market, (particularly) the apparel export market,” he said.
He particularly cited the signing of Ease of Doing Business law which has enticed more foreign buyers to place their orders in the Philippines.
“The processing of export licenses, they are all faster. The importation of raw materials will be more efficient now, we cut this working time maybe 50 percent. We will be saving maybe 5 percent of the logistics cost, plus the fact that we can have faster delivery time so now we can cope with the international requirement of fast delivery,” he added.
To meet increased demand from buyers, Young underscored the need for more Filipino factories to comply with social and ethical requirements.
“The more we have to sharpen our pencils because we lack factories and machineries,” he added. “How can we like put orders if they are not compliant? How can we put orders without these modern machineries?”
Young said the FOBAP and the Philippine Exporters Confederation, Inc. (PHILEXPORT) have been conducting a roadshow in various provinces wherein lectures and actual factory on-the-spot inspection are undertaken for corporate social compliance to enable exporters be qualified to sell to importers.