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Onshoring impact: Philippine clothing manufacturers brace for plant shutdowns

A trustee of the Philippine Exporters Confederation Inc. and president of the Foreign Buyers Association of the Philippines warned that several clothing and apparel manufacturing plants face closure as foreign companies move their operations back onspore.

In a statement, Philexport trustee and FOBAP president Robert Young warned that the onshoring or reshoring of manufacturing “can result in the imminent closure” of manufacturing plants in the Philippines geared for the export market and the “massive displacement of apparel workers.”

Young said “it may cause the extinction of such an industry.”

To prevent the closure of the plants, Young said problems such as the restrictive cost of power, labor, and logistics must be addressed and improve the country’s competitiveness.

While labor cost is a big challenge to companies with reshoring or onshoring plans, digital and robotics will play a role in reducing costs going forward.

“The government and the private sector must realize the negative impact of these reshoring scheme plans and should join hands in seriously implementing solutions,” Young said.

He urged government to implement the Philippine Export Development Plan to bring down the cost of business and improve the country’s competitiveness.

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