NEARLY half of surveyed textile and garment companies reported a decline in their workforce over the past three years, as reduced orders, import competition and business restructuring put pressure on employment, according to the Department of Labor and Employment’s Institute for Labor Studies (ILS).
Of the 56 companies surveyed, 27 or 48.21 percent reported workforce declines, while 92 of 175 workers said their companies had recorded terminations over the same period.
‘The main contributing factors cited by the company were changes in export demand. Lack of clients, competition from imported products, technological changes, and even business restructuring,’ Loren Cayabyab of the ILS Employment Research Division said.
‘Nearly half or 46.96 percent said that the number of vacancies stayed the same in the last three years,’ he added.
The study found that employment was the labor outcome most clearly associated with Regional Comprehensive Economic Partnership (RCEP)-related trade shocks, with a one-unit upstream shock linked to an estimated 7-percent employment decrease and a downstream shock associated with an 11.1-percent decrease.
‘Among the labor outcomes, employment, wages, productivity and the gross value added, employment is the most affected,’ Cayabyab said.
Effects on wages, productivity and gross value added were not statistically significant in the short term, while workers’ reported wage increases largely reflected mandated wage adjustments, company initiatives and performance reviews.
‘A surviving business is not automatically a growing employer. And we need to look not only at whether companies remain operational, but also whether they are creating or sustaining decent jobs now,’ Cayabyab said.
Many companies rely on imported fabrics, yarn, machinery and other production inputs, while weaknesses in domestic textile manufacturing limit the industry’s ability to benefit fully from expanded regional trade.
‘The benefits of the RCEP are conditional and not automatic. The question is whether firms can earn access to imported inputs and regional supply chains linked to stronger domestic production and even employment,’ Cayabyab said.
The findings are preliminary, as the survey did not meet its intended sample requirement and covered selected regions rather than the entire country.
To address potential job displacement, the ILS recommended identifying at-risk firms and workers early and providing employment facilitation, retraining, income support and social protection.