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Development Choices for Philippine Textiles and Garments in the Post-MFA Era

Abstract The Philippine garments and textile industries were in crisis even before the end of the Multi-Fibre Arrangement in 2004. The crisis has deepened since. Ironically, the textile industry, a vibrant import-substituting industry, was a victim of the export-orientated garments industry. Located in Export Processing Zones and enclave industrial parks, the garments exporters have been dumping in the domestic market part of their duty-free textile imports. On the other hand, weak backward linkages have made the garments industry, which has been relying on cheap labour, uncompetitive in a global market dominated by the “full-package” producers, such as China and India. To be sustainable, the garments industry must focus on the niche and value-adding markets and on production-marketing systems based on skilled labour and respect for labour rights. Such a high-road approach, however, would require a no-nonsense government bent on pursuing a forward-looking development blueprint for these industries.