More than 20,000 Filipino workers may lose jobs in the garments and apparel industry this year, as exports continued to fall dramatically in the wake of the coronavirus pandemic, an industry group said Monday.
The Confederation of Wearable Exporters of the Philippines said the 50-percent decline in global demand for garments and apparel forced export companies, especially producers of designer apparel and leather goods, to cut thousands of jobs.
CONWEP said based on a study it submitted to the government in May, about 21,518 workers in the sector might be retrenched this year.
“What can you do when the global market is 50-percent down. We expected that as early as May 2020 based on a survey and we wrote the DTI [Department of Trade and Industry and DOLE (Department of Labor and Employment) about our concern. We have forewarned the government,” said CONWEP executive director Maritess Agoncillo.
She said among the first to retrench workers was Yuenthai Philippines Inc., a unit of Luen Thai International Philippines Group Inc., which is considered the largest fashion and designer apparel manufacturer in the Philippines. It manufactures bags and accessories for labels like Coach and Ralph Lauren.
Luen Thai lost about 30 percent of its 5,000 labor pool across all its companies in the Philippines, including 200 in Yuenthai.
Sports City International, which manufactures popular sports brands like Adidas, also laid off workers. The company has been operating in the Philippines for 32 years from seven factories in Mactan, Cebu where it used to employ 21,000 workers.
The Mactan Economic Processing Zone recently reported that 4,000 jobs in various locators were lost this year.
CONWEP in May said around 35 percent of CONWEP workers were in precarious situation and could be retrenched if the government failed to provide support to the sector.
The Philippine garments and apparel industry employs more than 260,000 workers, with 112,000 of them belonging to companies under CONWEP.
Garment exports went down by 49.5 percent in the first five months to $192 million from $377 million in the same period last year. CONWEP members reported combined exports $157 million as of May, down from $234 million in the same period last year.
Agoncillo said some buyers from the US, a major export destination for Philippine-made garments and apparel, had filed for bankruptcy under Chapter 11, making it difficult for Philippine-based companies to sustain manufacturing operations in the Philippines.
The US market accounts for 50 percent of the Philippines’s garment exports.
She said the local sector might sustain 40 percent in losses until the first few months of 2021.
“These companies are not closing. The orders may not be as big as before, but they are maintaining their factories,” Agoncillo said.