Philippines apparel exports to hit $1 billion this year despite U.S. tariffs

The country’s apparel exports are expected to reach $1 billion this year despite challenges from the United States’ imposition of higher tariffs on its imports, according to the Foreign Buyers Association of the Philippines (FOBAP).

“There’s a big possibility to reach $1 billion mainly due to the push-outs or accelerated garments and apparel shipments that started happening in the beginning of the tariff regime,” FOBAP president Robert Young told The STAR.

The 19 percent tariff imposed by the US on goods coming from the Philippines took effect on Aug. 7.

While the tariffs pose challenges for exporters, Young said apparel exporters have entered into special tariff-sharing interim arrangements with their buyers.

Under this scheme, exporters and buyers share the cost of the duties.

Some US buyers even opt to shoulder 100 percent of the levy imposed on exports.

“This is considered beneficial to our players in the meantime. For how long? We still have to renegotiate,” Young said.

As the tariff-sharing scheme may not last long, he said exporters have to find ways to reduce costs.

Even before the US tariffs era, he said that prices of Philippine apparel exports were already higher than those coming from countries like Bangladesh, Vietnam and China due to higher costs of doing business in the Philippines, including electricity prices.

He said apparel exporters are worried about the tariffs, citing US President Donald Trump’s unpredictability.

“Year 2026 is a big guess as it will be full of uncertainties,” Young said.

Data from the Philippine Statistics Authority showed that the country’s exports of articles of apparel and clothing accessories went up by 4.5 percent to $544.05 million from January to September compared to last year’s $520.53 million.

According to the Confederation of Wearable Exporters of the Philippines, apparel exports declined by six percent to $661.75 million last year from $705.63 million in 2023.

Trade Undersecretary Allan Gepty said the government is hopeful that ongoing negotiations with the US on the 19 percent tariff being imposed on Philippine exports would be concluded by next year.

“Based on our last discussion, we’re looking at by next year this will be completed,” he said.

Source: Phil Star