A local trade group is eyeing modest growth in the Philippines’ textile and apparels exports this year amid the looming shadow of recession in key overseas markets, which include the United States.
Foreign Buyers Association of the Philippines, an association of exporters and buyers of clothes, stated that this was despite the expectation of global headwinds worsening this year.
“We are still hoping for a [modest increase] of 3 to 5 percent in the textile and apparel sector, with the spill over orders of other countries’ as they tend to reject small orders,” said Fobap president Robert Young.
Young stated that the Association of Southeast Asian Nations will be relocating some of China’s garment producers to the Philippines. Young also said they expect the local garment sector in these states to reap the benefits.
Some western media outlets reported that analysts and experts forecast the US entering recession in the coming year. This is due to the Federal Reserve’s continued increase of policy rates.
Young claimed that last year’s fears of a recession had lowered consumer spending in key markets. This was most evident in the United States. However, orders from overseas clients have declined in parallel.
Young estimates that the annual value of Philippine textile exports is approximately $1.5 billion.
These are the key markets for export, along with the United States and European Union. There is also a lot of Asian countries.
Young stated that their expectations for the Philippine economy are mild-to-low-mid recession. Young argued that because the Philippines isn’t entirely trade-driven, but is also dependent on remittances, they expect the Philippines to experience a moderate to severe recession.
Fobap officials said that they pray that authorities have an immediate response to recent problems, such as the Ninoy-Aquino International Airport air traffic chaos.
The airport, which serves as a crucial gateway to Metro Manila, experienced power outages and “tech glitches” according to authorities, prompting flights to get cancelled, delayed or diverted on New Year’s Day.
Young also urged the government to act on prevailing prices of goods, which he described as “ridiculously high.”
“It’s a bad signal to international businesses,” said Young.
The Philippines’ inflation rate climbed to 8.1 percent in December from 8 percent in November, bringing the 2022 average to 5.8 percent according to the Philippine Statistics Authority. INQ
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