The Philippines’ garments, textile and apparel sector expects a modest rebound next year, with exports expected to rise 2 percent to 5 percent from this year’s anticipated $1 billion in sales.
This optimism is led by government efforts to reduce the 19 percent US tariff and exporters’ active exploration of new markets.
Foreign Buyers Association of the Philippines (FOBAP) president Robert Young said 2025 turned out to be “surprisingly good,” largely due to advance deliveries made to cushion the impact of higher tariffs.
The industry remains hopeful that this growth will carry into 2026, especially if ongoing government efforts to renegotiate tariff terms with Washington bear fruit.
“We are still hoping that with government intervention there will be adjustments,” said Young, who also serves as trustee for the textile, yarn and fabric sector of the Philippine Exporters Confederation Inc.
“They are trying to talk to Washington about reducing the 19 percent tariff, similar to what President Donald Trump did for other countries, where rates were lowered and in some cases reduced to zero,” said Young.
As part of their strategy, exporters are actively diversifying their market presence, targeting opportunities in the European Union, the Association of Southeast Asian Nations, Canada and Australia.
The industry is also counting on the expansion of free trade agreements (FTAs) to unlock new markets, noting that the Philippines lags behind its ASEAN peers in terms of FTA coverage.
To improve competitiveness, the sector is seeking government support to offset high power and labor costs.
“We have been asking for some subsidy on power and labor costs,” Young said.
“We have also been talking to the Department of Labor and Employment about possible leeway, such as tax deductions tied to export performance,” he said.
Young expressed optimism that exports could return to the $3 billion to $5 billion range within the next two to four years, provided government support continues and more FTAs are secured.
The establishment of new textile factories in the Philippines is critical to achieving that target, as it would reduce dependence on imported fabrics from neighboring countries and lower overall production costs, he said.
