First of three parts
MAGALING magdala.
Filipinos, especially those who are cosmopolitan and travel abroad, are known to carry themselves well in the fashion sense. In their Sunday best, they look smart, appear chic and wear well even lesser-known fashion brands.
Many also know how to spend, and spend they do.
According to a report by the Philippine Statistics Authority (PSA), total spending on clothing and footwear alone amounted to P36.358 billion last year. In 2014, when GDP slowed to 6.3 percent, total spending on clothing and footwear hit P32.985 billion.
The spending allotted to clothing and footwear in the country posted a 10.2-percent growth rate for 2015, the PSA data showed. This trend is seen to increase over time, as long as the population grows and spending continues.
The country’s population growth rate remains high compared to Malaysia and Indonesia at 1.7 percent annual average from 2011 to 2013, according to World Bank data.
In a survey retrieved from IndexMundi, the number of people living in Metro Manila for July 2014 alone reached 11.862 million. The population for the entire country was at approximately 107 million.
A significant portion of this number are living and working abroad who are credited by several studies as the source of the cash consumers pump into the economy.
For one, remittances from overseas Filipino workers (OFWs) reached $2.2 billion just for the month of April last year, according to Bangko Sentral ng Pilipinas data. OFW remittances make up nearly 10 percent of the GDP. Several studies have noted remittances also accelerates consumer spending, and consumer spending is seen to remain a growth driver for the Philippine economy this year.
The combination of a spending population and steady source of cash from abroad has made the Philippines an attractive market.
And as Filipino haute couture artists and designers made waves in the global market, it was not too long before the country lured foreign brands.
British Embassy Director of UK Trade and Investment Mike Moon acknowledges the Philippine market’s lure is undeniable.
“The Philippine market presents a wide range of opportunities for companies looking to expand their business overseas,” Moon told the BusinessMirror in a letter sent via electronic mail.
“The country’s market size, the population’s purchasing power and increasingly sophisticated taste make it an attractive market for foreign retail [and/or] fashion companies.”
Indeed, British fashion brands like Clarks, Debenhams, Lush, Marks & Spencer and Speedo have slowly become a fixture in the country’s retail landscape. Nearly three years ago, local firm Vogue Concepts Inc. secured the franchise for TM Lewin.
The Philippine Franchise Association (PFA) notes that even though there have been a number of foreign brands entering the Philippine market over the years, the local market, in a way, still has the upper hand.
“Some foreign brands have the advantage because the preferred locations they get [are] in the [shopping] malls,” the PFA said in an e-mail to the BusinessMirror.
“Local franchises also need to remember that they know the market better. They need only to remember that, unlike in other countries where a certain American brand is their
No. 1 franchise brand, the Philippines is proud to have a homegrown brand as the No.1 franchise in the country.”
Indeed, the entrance of foreign brands poses both a number of challenges and opportunities for the local industry. The local homegrown businessmen have to decide where they stand within this clothing
retail arena.
If not addressed properly, local clothing firms can see their business unravel if they fail to keep up with the brand power backing up competitors. Local entrepreneurs and businessmen, however, can take advantage of the entrance of international brands that have entered or planned to enter the Philippine market.
Sowing machine
ONE source of support the local fashion business sector can rely on is the Philippine Design Competitiveness law, or Republic Act (RA) 10557.
Approved in 2013 by the 15th Congress, RA 10557 aims to promote and strengthen Filipino design. The law understands there is a huge talent pool of designers here in the Philippines that can be cultivated and introduced not only in the local market but also in the international playing field.
The Act also pushes for the patronage of local products, the protection of intellectual property with regard to design, the promotion for collaboration among local design stakeholders and more. The Act also reiterates the role of the Design Center of the Philippines, in which it shall support and foster the creativity and talent of Filipinos who wish to pursue the retail or fashion design course, respectively.
Stitch in time
HOWEVER, the “combo” tack of greater local patronage and ramping up production is not new.
The 1950s saw the emergence of the Philippine retail sector and the establishment of the textile and garment industry in the Philippines. The birthing was due to the combination of encouraging consumer patronage of locally made products and increasing levels of local production.
Dependence on imports from other countries was to be minimized, if not at all eliminated. Industry players also encourage use of indigenous materials like abaca and piña. The advocates opined the country can sustain its local garment industry and supply international markets as well, because these materials are abundant and can be sourced locally in the Philippines.
But the entry of China, the aggressiveness of Thailand’s garment sector and the flooding of cheap imports signaled the Philippine fashion industry’s death bell.
The Department of Trade and Industry (DTI , however, never said “Uncle” even as the local garments and textile industry writhed in pain from the competition coming from foreign brands. It encouraged the industry to meet the competition head on via exports.
Hence, the DTI Garments and Textile Industry Development Office arm reports a steady growth in terms of retail exports of the country. A
staggering $2.14 billion was brought in by retail exports alone for the country in 2011. Of the total amount, apparel exports had a $1.92-billion share and textiles had $162 million, DTI data showed.
The data also showed that apparel and textile exports have been increasing annually since 2008. This sector rakes in approximately 91.1 percent from total exports.
This condition offers a sweet spot for the country’s fashion retail industry.
For one, the Philippines is on its way to becoming a fashion go-to for both local and foreign trendsetters alike. For another, the country can tap numerous sources of materials not only locally but from the fellow members in the Association of Southeast Asian Nations.
Indeed, the country’s fashion industry can flourish along with the major fashion capitals of the world if its potential is utilized efficiently.
To be continued
2 comments
huhu cant find the next and third part of this article 🙁
pls help a student to pass her majors 🙁 haha