PHILIPPINE EXPORTS of hard goods and garments are expected to post flat growth this year to about $900 million if the US does not reauthorize its trade preference program, according to the Philippine Exporters Confederation, Inc. (Philexport).
Philexport Trustee for Textile, Yarn, and Fabric Sector Robert Young said that the industry is hoping for the reauthorization of the US Generalized System of Preferences (GSP) and starting the negotiations for a free trade agreement (FTA) with the US.
“(If the GSP is not reauthorized), we will just be flat; we will just survive. In garments, (export sales) could go even lower because we cannot supply buyers with the required quantity due to prices,” according to Mr. Young, who is also the president of the Foreign Buyers Association of the Philippines (FOBAP).
“Everything is a waiting game because of (turnover of leadership to President Donald) Trump,” he added.
According to Mr. Young, the revival of the US GSP program can increase exports, especially for hard goods, by 5-10% this year.
The Philippines was a beneficiary of the US GSP, which allowed duty-free entry of over 3,000 Philippine products into the US market. The program expired on Dec. 31, 2020.
Meanwhile, Mr. Young also considers the prospects for a Philippines-US FTA to be slim.
“That’s for us a long shot. I don’t know if the FTA can be granted by the Trump administration, although our Department of Trade and Industry is strongly lobbying right now,” he said.
“Trade Undersecretary Ceferino Rodolfo has announced that they are trying very, very hard (for a bilateral FTA), so that is good news because, you know, the orders are there,” he added.
The US accounts for 90% of the country’s total exports of hard goods and garments, while ASEAN and the European Union account for the remaining 10%.
Mr. Young said association members have received new orders for hard goods worth $2 million from retail stores in the US and Europe.
“These goods include bread baskets, hampers, fruit baskets, and houseware made from vegetable fibers like abaca, sinamay, and tikog (a native reed),” he said.
“More buyers still prefer natural fibers like abaca for their tableware (for example),” he added.
To meet demand, he said that FOBAP and Philexport tapped producers of indigenous fibers in the Eastern Visayas, who will be trained in product quality specifications to qualify them as exporter suppliers.
“This way, we can solve the skills gap and the quality problem,” he added.
The livelihood training program, which is targeted to start late this month or by next month, is expected to benefit around 250 weavers. — Justine Irish D. Tabile