Philippine garment makers could cut around 21,000 jobs this year.


Philippine garment exporters expect to cut around 21,000 jobs this year as orders from the U.S. plunge, prompting workers to call on international brands, including Adida,Under Armour and Lululemon, to help avert further layoffs.

Philippine garment exporters

The estimated job cuts are based on an industry survey and are equal to a fifth of the 112,000 workers employed by member-companies of the Confederation of Wearables Exporters of the Philippines, or Conwep, which produce clothes, bags and shoes for major global brands.

“What you’re seeing is a direct impact of the pandemic,” Conwep executive director Maritess Agoncillo said in an interview on Monday. “The orders are not coming in anymore.”

Major contactors based in the central island of Cebu have already laid off over 4,000 workers early this month and more job cuts loom, according to Dennis Derige, a coordinator for the Mactan Export Processing Zone Workers Alliance, whose members include retrenched garments workers.

“Some 4,000 breadwinners had the surprise of their Covid lives when they were unceremoniously terminated without any clear criteria,” said Rene Magtubo, PM chair. This is the single largest lay-off in the Mactan Ecozone since the 2009 economic crisis.”

The MEPZ Workers Alliance said the majority of the workers are women with families and little prospect of finding new jobs in the pandemic economy.

“As per our monitoring, several hundred workers are being fired in each of the following factories: Vertex One, Mactan Apparel, Globalwear Manufacturing and Feeder Apparel,” explained Cherry Abadilla, spokesperson for MEPZ Workers Alliance.

She added that the mass lay-off at Sports City follows earlier terminations at Yuenthai and Kor Landa where 200 and 67 workers were affected. “There is a common modus operandi in all of these lay-offs. They were surprise firings without prior notice. This is inhumane and disruptive of workers’ lives.”

The two groups are calling on the affected workers to fight for their jobs and oppose the impromptu termination. PM said it is providing legal assistance to laid off workers and has held an online consultation.

“We call for a timeout on retrenchments in the ecozones,” said Magtubo. “We demand immediate action from the Department of Labor and Employment (DOLE), the Philippine Economic Zone Authority and the local government units.”

“Our business and that of our buyers and customers worldwide have been gravely affected [by the pandemic] considering that our products are classified as non-essential and luxury items,” Sports City said in a statement on Tuesday, without identifying its clients.

A spokesperson for Adidas did not comment on the specific situation at Sports City but said “fair labor practices, fair wages, and safe working conditions” are mandatory for all Adidas suppliers.

Under Armour and Lululemon have yet to comment.

Agoncillo declined to name Conwep’s clients but said her members have struggled from weak demand from the U.S., which makes up around 75% of orders.

Apparel exports fell 49% to $192 million from January to May this year, she said.

“By this time, we should be receiving orders for spring [next year] but there are no orders,” Agoncillo said, adding that manufacturers are only downsizing, not closing.

The layoffs are expected to deal a blow to the local job market. The Philippines’ unemployment rate eased to 10% in July, from a record 17.7% during the height of the lockdown in April, but that is still double from 5.4% a year ago.

The Philippine government has been eager to revive its garments sector — a major industry in the 1990s until an export quota was phased out — through an FTA with the U.S. Talks for the agreement, however, have faced delays.

“We may need an aggressive approach to our market access issues, rekindle the U.S.-Philippines FTA agenda and the enhancement of the EU GSP+ [Generalized System of Preference] program,” Agoncillo said.


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