Phl may lose $5-M potential investment if US Congress rejects Save Act

MANILA, Philippines – The Philippines may lose $5 million worth of investment for a denim facility if the US Congress decides to nix the Save the Industries Act.

At the same time, the government has already spent P60 million in the past two years mostly for the lobby of the bill and is expected to spend more as the bill will be refiled during the 112th Congress.

In a press conference, Board of Investments (BOI) managing head Cristino L. Panlilio said that they are willing to spend the P450 million left in the GTEB fund for the passage of the bill. “Definitely we will re-file the bill and we will provide the necessary support,” he said.

At the same conference, Luenthai US president Rick Helfenbein said that they will only invest $5 million for a denim facility in the Philippines once the Save Act is passed. “There is no real point in putting up a denim facility if the Save Act is not passed,” he stressed.

Helfenbein, however, stressed that the denim facility is only for the Philippines. If the Save Act is not passed, he said they will simply abandon the project and not move it to another location. The denim facility was promised to President Aquino by Luenthai.

The proposed denim facility will provide 2,000 new jobs. This medium sized facility will be able to produce 150,000 pairs of denim per week and 600,000 pairs monthly. He noted that there are four major denim mills in the US which needs a market. “The US textile needs new markets to sell products.”

Helfenbein explained that once the Save Act is in place, it is 10 percent cheaper to produce in the Philippines using US textile than producing it in China using Chinese made fabrics.

“The plan of Luenthai is to triple the population in the Philippines in three years but the denim is really contingent on the Save Act,” he said.

On the re-filing of the Save Act bill, Helfenbein said that they will be making minor revisions to the bill in order to address some of the concerns of both the US and the Philippine players. “We will be making some technical adjustments,” he said.

Helfenbein refused to elaborate on what changes will be made. “We will delete three to four items that don’t affect the greater good.”

For instance, he said that a short supply clause will be added to the bill because it may be that the supply of textile is lower than the demand.

At the same time, he said that they will be removing the clause allowing for the importation of US yarn to the Philippines to be made into fabric that will be re-exported back to the US. –Ma. Elisa P. Osorio (The Philippine Star)