FOBAP: Layoffs of workers inevitable if garment orders continue to decline

·Contributor
·2 min read
Workers make denim jeans for export at a garment factory in Manila June 17, 2008. FOBAP earlier this year projected billions of dollars of growth in the garment and textile industry, amounting to half to $1.5 billion in revenue. (Photo: REUTERS/Romeo Ranoco)
Workers make denim jeans for export at a garment factory in Manila June 17, 2008. FOBAP earlier this year projected billions of dollars of growth in the garment and textile industry, amounting to half to $1.5 billion in revenue. (Photo: REUTERS/Romeo Ranoco)

The Foreign Buyers Association of the Philippines (FOBAP) said that the garment industry in the Philippines might be in the red as the United States significantly cuts down its orders of Philippine-made garments for brands like Levi’s, Zara, and Uniqlo.

“Our orders are now down by 5% and we expect this to go down further. As it is, 5% is already big,” Robert Young, FOBAP’s president and chairperson, told the Inquirer on Friday (Sept 2) in an interview.

Earlier this year, despite the challenges worsened by the Russia-Ukraine war, FOBAP projected an expansion of almost half to $1.5 billion of the country’s garment and textile exports, saying that they have already received bulk orders from countries that other top garment exporters cannot serve like Vietnam, China, India, and Bangladesh, due to “minimum order quantity requirement.”

“We will hit [the target] easily because we have all the orders right now on hand,” Young said in March. “We can now project that the $1.5 billion [exports volume] for 2022 year-end is just a walk in the park.”

He said that countries such as the United States, Australia, Canada, Japan, and other major European countries usually export $1 billion of garments and other wearable goods yearly.

If the order continues to go down, Young said that they would have no choice but to lay off some workers.

He said that the rise in inflation and the US economy being on the brink of recession affect consumer spending. The higher the inflation, Young said, the more likely it is for consumers to cut down their purchases, leaving large volumes of export unsold, thus resulting in them ordering less than they usually do.

“They have a lot of unsold stocks of t-shirts and everything. There’s not a lot of people buying the products,” he said.

“You know what they say, when the United States catches a cold, the whole world gets it as well,” Young added.

Meanwhile, the US Congress has already passed the landmark Inflation Reduction Act which would tackle the problem of rising inflation in the US head-on.

Marvin Joseph Ang is a news and creative writer who follows developments on politics, democracy, and popular culture. He advocates for a free press and national democracy. Follow him on Twitter at @marvs30ang for latest news and updates. The views expressed are his own.

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