Philippines: Garment factory at risk of closure amid increasing pressure from US tariffs
"Central Luzon garment factory faces closure amid US tariffs, rising wages", 15 October 2025
A GARMENT FACTORY in Central Luzon is facing closure, as rising labor costs and increasing pressure from US tariffs weigh on its operations, an industry group said.
“Due to the unfavorable business environment, the latest wage increases, the reciprocal tariff issue, and related circumstances, the company investor is considering closure of a factory in Region 3,” Confederation of Wearables Exporters of the Philippines (CONWEP) Executive Director Maritess Jocson-Agoncillo told BusinessWorld.
“We are trying our best to minimize job loss as of now. We are trying our best to retain jobs,” she added...
“That is 3,000 jobs… I think they are closing… We certainly do not want them to close,”...
Foreign Buyers Association of the Philippines (FOBAP) President Robert M. Young said that many factories are considering closure because of the US tariffs.
“There is no significant widespread closure in Region III, however, all the factories are now contemplating layoffs, temporary closure, and suspended work — all kinds of this reduced productivity,” he said in a phone interview.
“This is due to the threat of the US tariffs. Perhaps they were not as lucky as FOBAP that we were able to get some good deals from our US buyers that will share the cost of the tariff,” he added.
The US started imposing a 19% duty on goods from the Philippines on Aug. 17. It is the Philippines’ top export destination, receiving $12.14 billion in shipments last year.
Mr. Young also said that supply-chain issues as well as high costs of doing business are pushing factories to cut production.
“The supply-chain issues are still there due to our poor infrastructure program, and we have high costs of doing business due to power, labor, and logistical costs,” he added.
To address this, Mr. Young said that the garment sector is seeking government support and the creation of US tariff rescue package assistance...
“The other thing they can do is provide power and labor cost subsidies like what Thailand, Vietnam, and the rest of the guys are doing,” he added...
“The closures are not happening yet, but before these things happen, the government should already do something, especially now that they know what to do to help. All these together will deduct about 10-15% of the costs,” he added...