Nine foreign companies expressed keen interest to put up textile or garment factories in the Philippines that will help increase the country’s exports by more than $500 million a year, an industry executive said over the weekend.
Foreign Buyers Association of the Philippines president and Philippine Exporters Confederation Inc. trustee for textile, yarn and fabric sector Robert Young said the investments would help the Philippines adequately respond to the growing demand here and abroad.
“Demand for textile is high for the 110 million Filipino population with no local manufacturing source. Annual domestic clothing spending amounts to approximately $2 billion, not to mention the potential in the export business,” he said.
Young said four companies from Cambodia, three from India and two from Vietnam indicated their intention to invest in the Philippine garments and textile industry during their one-on-one business-to-business meetings as part of the 54th Asean Economic Ministers Meeting and Related Meetings in Cambodia in Sept. 11 to 18.
He said investments might start coming in before end-2022, following traditional procedures like ocular trip for assessments and project studies.
The planned investments, which are estimated at a minimum of $1 million for a textile fabric mill and $300,000 to $500,000 for a garment factory, are expected to generate at least 9,000 jobs, initially, he said.
Industry data showed the Philippines exports $1.5 billion worth of garments and textile each year, with a growth rate of 10 percent annually.
Young said once investments started to snowball, the local industry could start accessing key export markets like the US, the European Union and Southeast Asia.
Exports to the EU enjoy trade benefits under the Generalized Scheme of Preferences Plus. The country expects the US to reinstate the GSP privileges of the Philippines soon.
“It’s viable [investment] in the Philippines, the reason being is the overcrowding factories in countries like Cambodia, Vietnam and India. The expansion plans by multinational investors normally are spread over the region and not putting ‘all the eggs in one basket,” said Young.
FOBAP updated investors that the Philippine government approved trade reform laws like the amendments to the Foreign Investments Act, Public Service Act and the Retail Trade Liberalization Act, making it easier and profitable to invest in the Philippines.
“These aim to attract foreign investors by easing the barriers to inbound foreign investments. Moreover, the measures were enacted to push economic recovery by welcoming new capital, ideas, and technology that come along with the foreign investments,” Young said.