Philippines may allow 100% duty-free import of US textiles

The Philippine Government is expected to grant duty-free access to all US-made textiles, yarn and fabrics in exchange for the duty-free access of Philippine garments to that market.

This has transpired as Philippines Department of Trade and Industry (DoIT) is once again gearing up to amend the draft“Save Our Industries Act”bill, which has already been set aside by the US Congress three times.

DoIT Undersecretary Cristino L. Panlilio said they are redrafting the bill to increase its acceptability to industry players.

According to Manila Bulletin, Mr. Panlilio said presently a Philippine garment maker can import 70 percent of the raw material requirement from the US duty-free, to produce goods meant for re-export to that market, while the rest 30 percent of their imports are subjected to duty payment at prevailing rates.

However, Mr. Panlilio said looking ahead to tap the emerging Philippine market, the American textile associations are seeking that the Philippine Government remove this limit and allow all raw material imports, including textile, yarn and fabric from the US duty free, as a quid-pro-quo for duty-free export of the Philippines-made apparels to the US.

Such an amendment would also help the US to overcome the US$ 200 million to US$ 220 million that it would lose in revenue annually for allowing duty-free entry of Philippine garments and apparels.

Mr. Panlilio said this substantial loss of revenues was the main reason for which the“Save Act”bill was set aside by the US Congress three times.

Acceptance of the request of the US textile associations would require the Philippine Government to forego some revenues, and hence they have approached the Department of Finance in this regard, he said.

He said duty-free import of the rest 30 percent raw material from the US can be allowed as it would boost domestic garment production, resulting in enhanced employment generation. This would also boost the Philippine garment exports to the US, he added.

Source: Fibre2fashion