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AFAB exports down 23%, leather goods firms retrench workers

Exports from the Authority of the Freeport Area of Bataan (AFAB), home to the country’s biggest leather goods manufacturers, declined by 23.69 percent following weak global demand that caused temporary closure of some firms and the retrenchment of at least 18,000 workers.

AFAB Administrator Emmanuel D. Pineda (Photo credit:

In an online interview, AFAB Administrator Emmanuel D. Pineda said that despite the long lockdowns their locators were able to complete 8,586 export transactions amounting to $351.151 from January to end August this year or 23.69 percent lower compared to $460.446 million worth of exports in the same period last year.

But because of the lockdowns, Pineda said there are now 83 companies operating as of end August from the 97 pre-COVID. He, however, refused to say that the 14 firms have closed their operations saying they are hoping “they can once again resume operation.”

“As of present time, no closures are reported. The enterprises are getting by despite being significantly affected by the pandemic due to lower number of orders as most of the foreign countries they are exporting to, such as the US, are still in some sort of lockdown,” said Pineda.

“Some have officially retrenched personnel, some have had personnel on forced leave, while others are rotating their personnel so that everyone can still have income.”

He said all companies have to make adjustments due to pandemic. He cited the case of Medtecs Group, the country’s leading producer of surgical face masks, which has benefitted from the rising demand for its products.

Before the country was placed under harsh lockdown in mid-March this year due to the pandemic, AFAB registered firms had nearly 44,000 workers. Now, the freeport has more or less 26,000 workers reporting for work or at least 18,000 employees have been retrenched or on forced leave.

He said companies have to cut cost, but once orders start coming in, they will be called to report for work. Bataan has always been known as the manufacturing site for shoes and leather goods manufacturers that supply to some of the famous global brands.

Among the biggest leather goods manufacturers in AFAB are FCF Mfg. Corp. and FPF Corp. (Fashion Focus Group).

The huge garment firm Luen Thai group owned three companies in AFAB. These are Desktop Bags Phils. Inc. and DLX Bags Phils. Inc., which produce Coach ladies’ bags, and Boast Inc., which manufactures shoes for some of the famous global shoe brands. These firms are affected by decreasing orders and weak demand.

Pineda expressed optimism these firms could recover because none of them have shifted their production capacities to their other production hubs in the country or in other Southeast Asian countries.

“As of now, no firm has shifted, be it to other places in the Philippines or in the South East Asian Region,” he said.

Since FAB is a separate economic zone from the Philippine Economic Zone Authority, it has implemented its own initiatives to help locators and workers. Together with its chairman Pablo M. Gancayco, AFAB has made sure its Business Continuity Plan (BCP) is aligned with the BCPs of the enterprises.

“We are currently prioritizing projects that aim to assist our FAB Enterprises and our displaced workers,” said Pineda.

They are also working closely with partners to help locators shift to manufacturing other products that are having high demands like the personal protective equipment (PPE) or providing services like those in the BPO or IT while pursuing livelihood projects for its workers, both on its own and in partnership with TESDA.

Before the Enhanced Community Quarantine (ECQ) was declared, Pineda said that AFAB has been working closely with investors to provide more quality jobs for the residents living in Mariveles and nearby towns.

“With the present situation, we are doubling our efforts to assist the enterprises in coping with the need to continue their operations. We understand that our workers need their jobs so we make sure that health and safety protocols are implemented and we also help enterprises, in any way we can, find clients,” said Pineda.

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