According to the report, with 320,000 employees, the textile and garment sector is the country’s largest manufacturing employer and comprises 11% of the national total. An additional 700,000 people are employed as home workers and small sub-contractors. Despite China and other Asian countries capturing an increasing share of exports to the North America and Western Europe markets, in 2005 the textile and garment sector was the Philippines’ second largest source of export earnings with a 6.2% share—although this still remains 10% lower than in 1997.

The report states that there is an urgent need for the industry to restructure into larger manufacturing units, and update machinery in order to secure greater economies of scale, higher productivity and an improvement in its competitiveness. And, although there has been a substantial increase in foreign investment in the past five years, much of this has come from other Asian producers who increasingly see the Philippines as an attractive location for textile and garment activities. Research and investment is also going into the development of indigenous fibres—such as abaca, banana, pineapple and silk—in order to ease the country’s serious lack of locally-sourced raw materials.

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