Roundtable Dialogue with China Chamber of Commerce for Import and Export of Textile

Moderated by China ASEAN Business Council Executive President Mr. Xu Ning Ning, PTIC Beijing had an industry dialogue with China Chamber of Commerce for the Import and Export of Textile.

Commercial Counsellor Christine dela Cruz gave a briefing on the Philippine Garments and Textile industry, and highlighted the fact that this sector is a beneficiary of the country’s inclusion to EU GSP+ scheme.

dela Cruz emphasized that as the only ASEAN member covered by the EU GSP plus scheme, the Philippines has regained its competitiveness as an outsourcing-manufacturing destination for many export products. Chinese garments and textile industry must not miss this opportunity, to partner with Philippine enterprises in order to maintain a strong foothold in the EU market.

Philippine Garments and Textile Industry Brief Presently, the Philippine garments industry is made up of exporters (around 39%) and subcontractors (61%), which include homeworkers and small contractors to garment exporters. The major markets for garments and textiles are the United States, European Union and Canada accounting for approximately 90% of total garment exports.

According to the Philippine Statistics Authority, exports of textiles and apparel from Philippines crossed US$ 2 billion mark last year (2014). The Philippines earned US$ 2.095 billion through exports of yarn, fabric and apparel in 2014. Of this, yarn and fabric exports shot up by 34.5% year-on-year to $252.679 million, while clothing exports increased at 16.6% to $1.843 billion. In fact, Philippine textile and apparel exports grew at a higher rate compared to the 9% growth registered in total exports by the country during the year.

Philippine textile and clothing exports picked up in December 2014. While exports of textile yarns and fabrics surged by 64.3% year-on-year to $20.448 million during the month (January 2015), garment exports rose by a sharp 33.8% to $154.881 million.

The Philippines EU GSP plus status

The Philippines’ garment sector is expected to be a key beneficiary of the country’s inclusion within the EU’s GSP plus scheme from 1 January 2015, allowing the export of 6,274 additional items of all kinds to the EU at zero tariffs over the next 10 years. This means that the GSP+ brings tariffs down to 0% for around two-thirds of tariff lines. These include garments (previously subject to 5-9% tariff), footwear (previously 11.9%), tuna (previously 20.5%) and pineapple juice (previously 28.5%).

Under the GSP+, the coverage of duty-free product list has expanded immensely, making Philippine products more competitive in the EU market. As a result, new industrial investments in the country are expected to soar, particularly in garment and textile industry where high import tariffs previously imposed by the EU are now slashed to zero.

Business Opportunities There is a vast range of investment opportunities in garment production-related services such as sample making, fabric designing, and pattern making, washing, dying, printing and finishing. Investment opportunities also exist in the commercial production of indigenous fibers such as banana, piña, abaca, ramie and silk, which are abundant in the Philippines.

Joint Venture Arrangement with Local Garments and Textile Firms There are owners of existing garments and textile factories that are strategically located in the country who are determined to enter into joint venture arrangements with Chinese companies and investors. EU GSP+ has opened new opportunity for foreign investors to revive facilities and gain momentum in the industry, and take advantage of tariff-free market access to EU.

She also enumerated areas for cooperation: first to promote Chinese high-tech textile technology and textile machinery exports, so that Chinese textile and garment enterprises by virtue of the industry’s relatively strong financial and technical advantages go to the Philippines and surrounding countries and regions to invest and set up factories, thereby creating diversified markets.

About The Philippine Trade and Investment Centre in Beijing

Working with abroad spectrum of government and private sector groups to articulate, develop, promote Philippine trade and investment interests overseas, the Philippine Trade and Investment Centre in Beijing (PTIC Beijing)/the Commercial Section of the Embassy of the Philippines serves as the international trade policy negotiation, trade & investment promotions arm of the Republic of the Philippines in China.

For more information on GSP+ and list of eligible products, favourable investment policies: fiscal and non-fiscal incentives, please get in touch with the Philippine Trade and Investment Center/Commercial Section of the Philippine Embassy in China through:

Telephone Number +86.10.85865817 Fax Number +86.10.85865975 Email Address Beijing@dti.gov.ph