South Korean companies, the third-largest investor in the Philippines, are increasingly departing for Vietnam and other South East Asian destinations, driven by lower costs, red tape and an aversion to Filipino worker militancy and their preference for labour unions (reports Asia Sentinel).
Data from the country’s central bank, Bangko Sentral ng Pilipinas, shows a 90.3% decline in new foreign direct investment and foreign equity placements (excluding reinvestment) in the first six months of 2017, down from US$1.45bn to US$141m year-on-year.
Faremo International, a clothing manufacturer working for US apparel brands Gap, J C Penney and Kohl’s, located south of Manila and owned by South Korean firm Hansoll Textile, was closed a year ago as part of a strategic corporate decision. At least 800 regular Filipino workers lost their jobs, as well as hundreds of others who worked there on a casual status.
Like a number of Korean businesses in the Philippines over the past year, Hansoll said it intended to transfer Faremo’s existing manufacturing operations to Vietnam.
For the full story, see the November 2017 edition of Textiles South East Asia. Not a subscriber? Sign up HERE