GTEB ASSURES INDUSTRY OF STABLE TEXTILE QUOTA SITUATION IN 2004

The Garments and Textile Export Board (GTEB), an attached agency of the Department of Trade
and Industry (DTI), assured industry stakeholders, garment exporters and foreign buyers, of a
stable quota situation in 2004. This is despite limited quotas available in the last year of the quota
regime.

GTEB Executive Director Serafin Juliano, in a press briefing, informed that for 2004, the regular
quota flexibility called carryforward that allows borrowing from next year’s quotas are not
available anymore since quotas are completely eliminated by 2005. This, coupled with the 2003
overshipments charged to 2004 quotas, has resulted in the reduction of this year’s available
quotas for critical product categories in the U.S. by an average total of 9% against actual
shipments made in 2003.

Exec. Director Juliano said that there are 14 critical product categories in the U.S. for 2004.
These include pants, knit shirts, coats, underwear and nightwear.

To maximize quota availability, GTEB has applied the remaining available flexibilities provided
under the bilateral agreement with the United States, called swing (of 7% between quotas of 2
categories) and special shift (specific percentages that may be transferred between 2 categories).

GTEB also follows a scheduled release of the quotas to allow for better business planning and
development. It announced that all permanent and restorable quotas were released this February
based on the priority of entitlements established under the GTEB rules. The list of firms with
these quota holdings is posted in the agency’s website for quick reference.

GTEB is releasing and allocating the remaining free quotas between March and April. 50% of
these free quotas will be allocated based on the exporter’s previous year’s shipments using a
pre-determined formula called Cap & Rank. The other half will be allocated as quota incentives to
firms with verified investments on productivity- and growth-enhancing activities.

All details of the quotas already allocated and the quantities for allocation are published and
posted at the GTEB website.

“We are working closely with the Garments Advisory Council to monitor with complete
transparency the movements of the quota in 2004,” Juliano said. The council is a consultative
group that represents the general constituency of the industry. It is composed of officers from the
different garments industry groups such as the Garments Business Association of the Philippines
(GBAP), Confederation of Garments Exporters of the Philippines (CONGEP), Children’s Apparel
Association of the Philippines (CAAP), Textile Millers Association of the Philippines (TMAP), and
the Foreign Buyers Association of the Philippines (FOBAP).

Juliano also said that, for 2004, GTEB has eliminated the assessment fees for all quotas as
directed by former Trade Secretary Mar Roxas and in line with President Gloria Macapagal
Arroyo’s industry support program. This is meant to help the industry lower their cost of doing
business.

Exec. Director Juliano also stated that, given the limited quotas, GTEB has lifted restrictions on
quota transfers and exporters can now freely exchange or trade quotas. He clarified, however,
that these are business transactions entirely between the private sector parties concerned, and
GTEB’s role is simply monitoring quota utilization.

Meanwhile, Juliano assured that the government is making representations in Washington DC for
the re-instatement of the 6% carry forward flexibility in our US quotas.
Garments and Textile Export Board. (February 28, 2004). GTEB Assures Industry of
Stable Textile Quota Situation in 2004. Retrieved July 22, 2005 from the World Wide
Web: http://www.gteb.gov.ph/news/04/gteb_assure.htm