LAST-DITCH LOBBY TO REVIVE GARMENTS SECTOR / PAL COST-CUTTING TO SURVIVE
[PHOTO AT LEFT - Photo by: Tracey Shelton: A garment worker threads a sewing machine at a factory]
MANILA, SEPTEMBER 27, 2010 (MALAYA) The government will make a last-ditch lobby this week for the passage of a bill in the US Congress that would help triple exports of Philippine-made garments to $3 billion and restore 600,000 jobs in the garments sector in two years.
Cristino L. Panlilio, managing head of the Board of Investments (BOI), left Sunday for Washington where he is expected to meet with US legislators and seek to convince them to pass the proposed SAVE Our Industries Act.
The proposed legislation, patterned after similar measures benefiting mostly Caribbean countries, allows the duty free importation of Philippine-made garments fabricated from US textiles.
This is the last week of session of the US Congress before it takes a one-month recess before the elections in November.
Panlilio said if the bill is passed this week, it could be implemented by the second quarter of 2011 at the latest.
"Our chances are very good. We are enjoining Filipino-American community leaders to join the crusade," said Panlilio. These leaders include Loida Nicolas Lewis, Dado Banatao and Josie Natori.
Panlilio is also joined by members of the Confederation of Garments Exporters of the Philippines (Congep) and senior trade attaches in his trip to Washington.
Panlilio said investment commitments have been secured from local garments makers who have given up. They are prepared to re-open their facilities.
Garments makers who have survived the non-quota system are keen on expanding.
"I�ve talked to the union leaders. The measure will recall employees separated because of dwindling business over the last five years," said Panlilio.
Panlilio stressed the wide-reaching impact of the revival the garments business.
"Garments are a grassroots business. The skill of sewing is almost congenital. This will put to life again subcontracting in Batangas, Bulacan, Laguna, Pampanga and Nueva Ecija," Panlilio said.
"SAVE is actually meant to save the US textile industry which has been losing to China�s in terms of pricing and costing. We would like to become auxiliary participant to this," Panlilio said.
In the 1960s to 1990s or for four decades, garments exports stood at $3 billion a year or 20 percent of total exports which at that time amounted to $15 billion a year.
Exports are down to $1 billion after the quota system was removed.
"We lost out to countries with much lower production inputs like China, Bangladesh, Vietnam and Central American countries Coast Rica, Honduras," Panlilio said.
The industry used to employ 600,000; the figure is now down to 200,000.
(Congep) and the Garment Business Association of the Philippines (GBAP) have estimated an additional $1.1 billion worth of exports to the US, the industry�s main market, after the first full year implementation of the measure.
The groups also see fresh investments of $480 million and the entry of 60 new companies in the garments export business in the first two years.
Those investments are projected to create 210,000 new jobs, which are equivalent to half the number of jobs that have been displaced since the elimination of quotas on garments trade in 2003.
SAVE is part of the 809 Apparel Pilot Program where Philippine apparel made of US fabric will enter the US free of duty. It also provides reduced tariff on certain Philippine-made apparel regardless of the source of the fabric. - Irma Isip
PAL says �cost cutting� for suvival
Philippine Airlines (PAL) said that cost cutting measures like crew reduction and its planned spin-off of non-core units are major initiatives to ensure the airline�s survival.
In a news release, PAL spokesperson Cielo Villaluna said funds saved from belt tightening efforts are earmarked for payment of maturing dollar obligations, fuel costs, salaries, aircraft maintenance and other expenses.
To continue operating, she said the flag carrier needs approximately $230-million annually. About half of this must come from cost savings, while the other 50 percent would be raised through cash generation activities like aggressive sales and marketing efforts, she said.
Following huge losses due to the global recession and other factors beyond PAL�s control, Villaluna said all of the airline�s departments are mandated to be more cost-efficient.
She explained that cabin crew reduction is just one of many cost-cutting measures. "The cabin crew union demands that funds saved from manpower reduction should be equally divided among them. But this, unfortunately, is not the aim of the whole exercise. If we heed their call to give them the savings, we may have satisfied crew members today but no airline to speak of in the long term," she said.
Last July, cabin crew complement in PAL�s Boeing 747 aircraft was reduced to 16 from 18. Villaluna said this is still one crew higher than the minimum safety requirement of 15 crews for a B747 as mandated by international safety standards and by the Civil Aviation Authority of the Philippines.
Since the program�s start last July 1, Villaluna said PAL�s Cabin Services Department has not received any complaints about service quality, proof that the airline�s dedicated staff have been able to meet passenger expectations despite the reduced "manning" complement.
"Contrary to the cabin crew union�s claim, there has been no dimunition of employee rights or benefits. They work a little bit more for the same pay, which simply means more efficiency," she said.
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