Gender, Trade, and the Philippine Footwear Industry
Ma. Gichelle A. Cruz
Research and Extension Development Office,
College of Social Work and Community Development
University of the Philippines-Diliman, Quezon City
“I made elegant Reebok, Puma and Nike shoes for 11 years. But look at what I wear
on my feet – a cheap pair of plastic sandals. I am like those who build but are
homeless and those who till the soil but are hungry.” (Laura, sacked Filipina factory
worker) 1
The gender and trade discourse with respect to the shoe industry has taken different tracks in the
last few decades. The first track had to do with the export production of sports shoes, which focused
on the exploitation of thousands of women workers on the assembly line. The abuses they suffered
in the hands of transnational corporations were highlighted in various campaigns mounted by
consumer advocacy groups targeted mainly at the sensitive European market. Some companies in
the Philippines featured prominently in these campaigns, which alerted trade unions and other civil
society groups to the plight of Filipino women workers in export processing zones.
The second track has to do with the informalization of work through subcontracted employment in
the traditional shoe manufacturing sites such as Marikina, the focus of this study. Women workers
are found not only in the factories as formal wage labor, but also in small workshops and in
homebased production where productive and reproductive work are interspersed. As informal
workers who are irregularly and marginally employed , they are paid on piece rate (well below the
minimum wage if counted on an eight-hour basis), suffer from substandard working conditions, and
do not benefit from social protection.
The third track is highlighted by the fact that women comprise a significant percentage of managers
in the traditional shoe manufacturing concerns. The strong management and entrepreneurial roles of
women can be considered an asset in pursuing a gender-sensitive advocacy agenda for the shoe
industry at many levels: at the level of producers’ associations, at the local government level (the
Mayor of Marikina happens to be a woman), and at the national policy level.
With the declining trend in shoe manufacturing resulting from trade liberalization, many gender and
employment issues need to be addressed. How for example can the “race to the bottom” amidst
increasing competition be prevented so that workers’ rights and women’s rights can be recognized,
respected and fulfilled? What can be done to assist troubled entrepreneurs, especially the women, as
well as workers (both women and men) displaced or threatened by displacement from both formal
and informal employment?
This research attempts to provide a general global and national industry profile as the context for a
more detailed description of trends in Marikina City, the country’s premier shoe manufacturing
center. It goes into a value chain analysis as well as a micro-level case study focusing on a
particular shoe manufacturer catering both to the domestic and export markets, and using both
formal and informal production relations. With such an approach, this study hopes to : 1) to show
how gender relations influence production relations in the footwear industry, and vice-versa; 2) to
1
Quoted in Bethan Brookes and Peter Madden, “The Globe-Trotting Sports Shoes.”
http:/www.saigoncom/~nike/christian-aid.htm
1
explain the impact of trade liberalization on footwear producers and workers; and 3) to link the
research findings to the crafting of a gender-sensitive fair trade advocacy that involves stopping
smuggling, the recalibration of tariffs and the repositioning of Philippine-made shoes in both the
domestic and global markets through niching.
Women in Footwear Exports
In terms of footwear exports, Philippine-made shoes achieved a high point during the first half of
the nineties, mainly accounted for by sports shoes, and made possible by the labor of young women
like Laura above.
Philippine Exports 1991-94 (FOB US$ 000)
91
92
93
Total
8,839,514 9,824,314 11,374,805
Footwear
141,068 143,949 168,363
Sports shoes 104,156 110,673 118,096
94
13,482,896
210,262
113,704
Source: Bureau of Export Trade Promotion, Department of Trade and Industry
The major export markets then were the United States (the world’s largest importer of shoes)2 ,
Germany, the UK and France.
Beginning in the late seventies, transnational sports shoe companies starting with Puma engaged in
large-scale subcontracting for export through Korean and other partners in the Philippines. Reebok
followed in the mid-eighties and produced as many as 4.9 million pairs by 1993. Other brand-name
companies which at one time or another sourced their shoes here included Adidas, Hi-Tec, Nike and
Sketchers.3 Their partner production companies (Korean, American, Italian, Chinese, Japanese)
located themselves in export processing zones or in Metro Manila, where working conditions left
much to be desired.4 They were also highly mobile, moving to lower-wage countries in Asia when
they found the opportunity. Raw materials were largely imported from South Korea, Taiwan, and
Hongkong. Labor costs comprised a mere 14 percent of total costs.5
2
From the “State of the Sector Report on Philippine Footwear 2004”2 of the Pearl2 Project which included
the 2002 UN COMTRADE, the countries with the most number of footwear imports consist of the United
States (30.6%), Hong Kong (9.6%), Germany (7.8%), United Kingdom (6.7%), France (6.3%), Italy
(5.8%), Japan (5.6%), Belgium (2.5%), Netherlands (2.5%) and other countries (22.6%).
3
Adidas, founded in Germany, had only 10 percent of its annual 46 million pairs of shoes (1995 figures) in
Germany. The rest were produced in Asia. Sales totaled $2.13 billion in 1994; Hi-Tec, a British brand, also
subcontracted production to a number of Asian countries but suffered from competition from other brands.
Nike, a US brand, began in 1994; it also subcontracts to Asia and in 1994, sales was at $3.79 nillion. Puma,
originally German but bought by a Swedish , had over 70 manufacturing facilities worldwide. Reebok
originated from the US and had annual sales of $2.8 billion in 1994. (Bethan Brookes and Peter Madden, “The
Globe-Trotting Sports Shoes.” http:/www.saigoncom/~nike/christian-aid.htm.
Appendix, The Players).
4 For example, a study done in 1995 reported the following common problems: forced overtime, forced leave,
and “perpetual casualization.” Furthermore, some export processing zones had a no-strike policy. Many
companies did not contribute or remit payments to the social security system. (Ibid, p. 8)
5 “According to Nike, a pair of $65 shoes requires just $2.40 in labor costs. (the entire cost of making the
average shoe, including raw materials is about $16)). If the salaries of administrative staff are excluded, the true
labor costs are closer to $1 per pair. Over the past 30 years, Nike has built its $9 billion business on this model
of production – cheap Asian contract labor...” Brook Larmer, “Two Girls and a Shoe,” Newsweek Special Issue.
2
The following table shows a decreasing trend in the export of Philippine footwear from 1999 to
2003, largely explained by the fact that sport shoe manufacturing in the Philippines has declined
dramatically with the relocation of production companies. As late as 2005, however, long-standing
Korean companies such as Paramount Footwear and S.S. Ventures International (producing well
known brands such as Nike, Sketchers, and Tretorn and Vans) were featured in the news because of
their financial and labor problems. Both located in the Bataan Economic Zone, SS Ventures then
employed 1,154 workers, and Paramount, 1,200 workers. The workers complained of non-payment
of wages. 6
Philippines - Footwear exports 1999 - 2003 (in million US dollars)
Change year-on-year
1999
86.12
2000
76.18
- 11.54%
2001
73.40
- 3.64%
2002
47.23
- 35.65%
2003
45.96
- 2.69%
Source: Bureau of Export Trade Promotion, Department of Trade and Industry
Increased Imports, Declining Tariffs and Smuggling
The demand for footwear is calculated at the Asian average of less than two pairs per person per
year. In the case of the Philippines, with almost 87 million people of which a large percentage live
below the poverty line, it is pegged at 1.4 pairs per person per year, or a total of around 120 million.
Shoe manufacturers emphasize the fact that if only Filipino consumers patronize Philippine-made
shoes and prefer them over imported shoes, they will not be in the sorry state they are in.
After the Philippines had become a member of the World Trade Organization (WTO) in 1995, the
unabated entry of cheap goods from China7, Korea, Taiwan and other countries intensified. Shoe
imports rose sharply. From 1997 to 1999, the country imported an average of 38.5 million pairs of
shoes. By 2001-2003, the average volume increased to 56 percent or 60.2 million pairs.8 In dollar
terms, the value of Philippine imports of footwear rose from $34.245 million in 1995 to $70.169
million in 1997, then subsided to $50.941 million in 2003. 9 This affected our local industry as many
consumers would prefer going for cheaper priced products rather than supporting more expensive
but locally made leather shoes. Another problem is the Filipinos' continuing preference for foreign
shoe brands such as Sketchers, Nike, Adidas and Converse, most of which are imported from China.
Under Executive Order 334, the tariff schedule for the shoe industry was pegged at 15% in 2001,
10% in 2002, 7% in 2003 and 5% in 2004. 10Although EO 334 was superseded by another EO issued
6
Ernie B. Esconde, “2 Korean firms back to normal operations after PNB bailout,” in the Manila Times,
September 23, 2005.
7
China remains to be the largest footwear producer , responsible for supplying about 21% of world
exports in 2002. Ibid.
8
Illustration of Technical Smuggling in Shoes (1997-2003), document prepared and analyzed by Samahan
ng Magsasapatos sa Pilipinas.
9
NSO, Table 1. Value of Philippine imports and exports of footwear, 1990-2003 (in tousand US dollar),
cited in Allen J. Scott, “The Shoe Industry of Marikina City, Philippines: A Developing-Country Cluster in
Crisis,” in Kasarinlan: Philippine Journal of Third World Studies, 2005 20 (2), p. 83.
10
Jessica Reyes-Cantos, NAMA Negotiations and its Impact on the Shoe Industry, 10 September 2003
(http://www.focusweb.org/content/view/151)
3
by the Arroyo Administration, the halt in the reduction of tariff rates at 10% has not helped the
footwear industry due to many reasons, principally the unabated smuggling of shoes .
Footwear products are targeted for further liberalization under current WTO negotiations. The
reduction of industrial tariffs through non-agricultural market access (NAMA), is one of the major
issues in the WTO agenda. If the Philippines accedes to NAMA modalities, many non-government
organizations have warned that local manufacturing industries face extinction. As Johnny Gaudia, a
Marikina-based shoe manufacturer remarked, “Parang nakabaon ka sa lupa, huhukayin ka pa nang
matulin.” 11 Even if tariffs are already low, smuggling still takes place.
Even if tariffs are already low, smuggling still takes place. This is well illustrated by the example
below provided by the Samahan ng mga Magsasapatos sa Pilipinas (SMP), a coalition of small to
medium-sized shoe manufacturers:
Box 3: Illustration of technical smuggling in shoes12
Quantity
Value in US
dollars
1997
1998
1999
2000
2001
2002
2003
28,242,755
36,730,091
50,629,523
51,139,368
60,098,492
64,434,546
56,103,431
Percentage
increase in
quantity
212.79%
75,927,646
56,361,314
61,654,061
55,627,488
53,545,277
54,703,536
55,550,168
Percentage
decrease
in value
70.52%
Primary Source of Data: National Statistics Office
Processed by: Bureau of Export Trade Promotion (BETP)
Analyzed and prepared by: Samahan ng Magsasapatos sa Pilipinas
According to them, in 1997, the value of imported footwear products was about $76 million. By
2001, the Philippines actually spent less on imported footwear at $53.5 million. However, the
quantity has actually jumped from 28 million to 60 million pairs of imported footwear. The reasons
are “undervaluation”13 and “overquantity.”14
11
JP Andaquig, Ibon Features, “Trade Liberalization and the Demise of the Local Shoe Industry,’ posted
by Bulatlat. www.bulatlat.com/news/5-44/5-4-shoe.htm. Gaudia used to have 100 workers, now he only
has “on call workers.” Orders averaged 10,000 a month before; now, he is lucky if he gets a hundred a
week.
12
Various documents from the Samahan ng Magsasapatos sa Pilipinas (SMP) – an organization of footwear
makers in the Philippines, majority of whom come from Marikina City.
13
Undervaluation occurs when a single-strap slipper worth 40 cents a pair is, for example, declared at
only 10 cents a pair, or when shoes valued at $2.50 cents a pair is declared at only 30 cents. The SMP also
discovered branded shoes like Sketchers declared at only $1 a pair when such shoes could fetch up to $11.
14
Overquantity refers to a situation wherein the importer declares a much smaller number of items than
actually imported. For example, MG Sanchez Trading, an importer of slippers, declared their Entry
Number C-35021 dated April 5, 2005 as containing 3,628 pairs of slippers but it was found to contain
40,088 pairs
4
One good example is a pair of leather shoes which in 1997 was estimated to cost $12.65. In 2002,
the same pair was declared at only 76 cents. Yet, the estimated cost of leather alone for this type of
shoe was already more than $3.
Industry Trends, Structure, and Gender
At present, the footwear industry is mainly dominated by small and medium sized firms which have
10 or less laborers and are typically family-owned businesses. Marikina, as the center of the leather
footwear industry, accounts for almost 70 percent of the total number of footwear firms in the
country.
With the prohibitive cost of importation, weak product demand and stiff competition, some large
producers who used to export before are shying away from the export market and are concentrating
instead on the local market. This makes small producers more insecure because of their possible
displacement from the domestic markets.
A survey conducted by the PEARL215 project covering 49 firms (mostly found in Marikina) showed
variable patterns of subcontracting depending on the size of the firm.
The micro enterprises among the respondents employ two to five subcontractors each.
Their subcontractors would have an average of from 8 to 10 workers each. Small-sized
companies contract five to eight subcontractors, which employ an average 10 to 12
workers. In a few cases, these companies use as many as 21 subcontractors, which have
an average six workers each. The medium-sized companies use seven to 10
subcontractors, with each have an average of 15 to 25 workers. The large companies
use four to seven subcontractors, though the workforce of these is bigger at 30 workers
per subcontractor. (pp. 38-39).
Significantly, more respondents said that their subcontractors are mostly women.
The survey showed the strong position of women in management positions. More than half of
corporate presidencies and 62% of Board of Directors positions were occupied by women. More
women were administrative managers (80 percent) and materials manager (60 percent). Concession
managers in charge of handling inventories were all women. Half of marketing and production
managers were women. (p.35).
Women also comprised almost half of the work force, and numbered more than men (68 percent)
only in administrative and office work. Men comprised about 70 percent of those in quality control
and technical work. (p. 37)
15 15
PEARL Project2, “State of the Sector Report: Philippine Footwear.”
http://www.pearl2.net/pages/se/reports/footwear_04.pdf#search='philippine%20footwear'
5
Value Chain, Industry Cluster
and Convergence
Local
(majority in Bulacan)
Small- backyard operation
Large – highly mechanized
operations with superior
chemicals in treating leather
Foreign
Australia, USA,
Brazil, Bangladesh
and Taiwan
Leather
Tanning
Industry
Suppliers and
Distributors for
leather
substitutes
Local
wooden shoe lasts:
Marikina and Caloocan
Heels, insoles,etc.:
Marikina, Antipolo,
Caloocan, Bulacan,
Laguna
(imported materials)
Foreign
Shoe lasts: wooden and
plastic, rubber, molded
aluminum
Small: China and Taiwan
Large: Italy, Singapore, USA,
Germany and Taiwan
Heels, insoles,etc.:
Small: Hong Kong and Brazil
Large: Italy, USA, Germany,
Japan and Taiwan
Components
Shoe
Supply
Stores and
*Controlled
by Chinese
Distributors
and
suppliers
Supply Chain
Raw Materials Input
-Hides and skins
-imported leather materials
tanneries
-chemical used for leather
materials
-Leather substitutes such as
plastics, rubber, synthetic
leather, textiles, etc.
Supply Chain
Chain
Equipment
and
Technolog
y
Market Chain
Independent Outlets
Laborers
(formal &
informal)
- Pattern
makers,
cutters,
sewers,
packers,
sorters, etc.
-machines,
special
tools,
training,
designs and
innovations
-Wholesalers/retailers
-Traders/ agents
•NCR
Department
stores
•Boutiques and
other retail outlets
•Concessionaires
Marikina Shoe
Manufacturers and
Subcontractors
Enterprises
(Rusty Lopez,
Catmar, etc.)
Ready made, Prefabricated
Components and
Accessories
Shoe Lasts
Heels, insoles,
outsoles, unit soles
*Other support
components and
Accessories
*controlled by Chinese
distributors and suppliers.
Department of Agriculture
Bureau of Customs
(DA)
Samahan ng Magsasapatos
Local Government Units (LGU)
sa Pilipinas (SMP)
Department of Trade and Industries (DTI)
Fair Trade Alliance
TESDA
Production/Assembly
Industry Chain
Global,
Export
Market
Final
Direct sellers
Related and Ancillary
Industries
•Shoe Last manufacturers/
•Shoe components and
accessories manufacturers
Indirect
Industries
Consumers
Provincial
Department stores,
Boutiques and other
retail outlets
Shoe Importers,
Traders and Agents
Industry Chain
Workers (formal & Informal)
Philippine Footwear Federation
LGU
Manufacturers
German Agency*
DTI
Subcontractors Enterprises
India*
TESDA Canadian Intl Development Agency Sikap Mo
Market Chain
LGU
DTI
Fair Trade Alliance
Philippine Footwear Federation
*modified from E. Morato’s Industry Cluster, Chain and Covergence of Marikina Shoe Industry
6
The footwear supply chain, production/assembly chain , and market chain in the previous diagram outline
in detail the sources of inputs for footwear manufacturer, current distribution channels, and convergence
areas for key players connected to the industry.
A. The Supply Chain
Raw material inputs are both locally produced and imported. The shoe industry depends heavily on the
availability of these raw materials for continuous production. Most manufacturers attribute 55-70 percent
of the total cost of footwear production to raw materials input.
Locally produced raw materials inputs are sourced directly from the domestic leather tanneries located
mostly in Bulacan. Many of these small local tanneries still operate in their backyards while a few large firms
are able to equip their operations with machines and use superior chemical treatments.
The local shoe supply stores and components suffer heavily from foreign competition while depending on
foreign imports for their needed raw materials for the continuous manufacturing of their products.
Wooden lasts are manufactured locally although raw materials are imported whenever there is a scarcity of
local supply. Small firms import raw materials from China and Taiwan while larger firms can have more
product selections and import components from Hong Kong, Brazil, Italy, USA, Germany, Singapore and
Japan.
Other problems identified by footwear manufacturers in terms of acquiring raw materials include
availability, quality, delays in delivery attributed to bureaucratic red tape for the processing of imports, and
rampant smuggling.16
B. Production/Assembly Chain
The shoe industry, being a labor intensive industry, involves manual production in various stages. Workers
in the industry are typically referred to as “mag-aareglo” and “sapatero”. Mag-aareglo refers to shoe workers
(women dominate since the work requires refinement of work attributed to them) involved in pattern
making, sizing, cutting, sewing while the sapatero (male only since the work demands strength) handles the
activities related to the assembly of shoes using tools and heavy equipment.
Through the years, there has been a high labor turnover of experienced sapateros and they are progressively
being replaced by younger and inexperienced workers who have less interest in shoe craftsmanship.17
While the male sapateros have the distinction of being associated with Marikina’s pride in its producers’
craftsmanship, many mag-aareglo (mostly women) lament their poor recognition in the industry as well as
the meager pay they receive as piece rate workers. Most of them desire better employment opportunities
but are forced to be contented with what they can receive for the moment.
With the industry suffering from the effects of trade liberalization policies, many small shoe manufacturers
and indirect industries such as variety stores and lodging houses have been forced to close shop. Some shoe
manufacturers streamlined their operations to specialized shoe-manufacturing services. From 400 registered
shoe manufacturers in 1992, the Marikina local government recorded a 46.5 percent decline of local
manufacturers. As of September 2005, there were only 186 registered shoe manufacturers .
Councilor Vic Sabiniano, President of Samahan ng Magsasapatos ng Pilipinas (SMP) revealed how his own
shoe factory shared the fate of the small and medium scale enterprises which were forced to close shop or
temporarily stop production due to liberalization policies and smuggling activities employed by some shoe
store owners. Others who were able to survive transferred their shoe production facilities to nearby towns
like Rizal and Laguna due to Marikina’s “imposition of high taxes”.18
16
Morato, Eduardo. “The Shoe Making Industry of Marikina,” Asian Institute of Management, January 2005.
Ibid.
18
In response to this charge, Councilor Sabiniano explained that Marikina is firm and consistent with its policies
and implements the same tax policies as other municipalities.
17
7
Related ancillary and support industries (raw materials suppliers, suppliers of shoe components, parts and
accessories, retailers, and shoe repairers among others) along with rediscounting firms have emerged as a
result of the narrowing competition among shoe manufacturers in Marikina.
Depending on design features, shoe production may take up to a hundred steps of various work process.
The basic steps include pattern making, cutting, skiving machine operation, upper making, upper sewing,
outer sole and insole sewing, insole assembly, shoe lasting, outsole assembly, and finishing.19 Technology
application, quality control and product development combined with aggressive marketing are among the
effective business tools employed by leading shoe manufacturers like Rusty Lopez, Otto, Itti, and Via
Venetto among others.
There are, however , issues of occupational safety and health. Some footwear enterprises have been using
toxic solvents in spray paints and glues. In a case study conducted in Amang Rodriguez Medical Center in
Marikina, research findings that a correlation exists between incidence of spontaneous abortion and
exposure of pregnant women to high levels of organic aliphatic solvents being used in the manufacture of
shoes.20
To illustrate the relationships between various components of the production/assembly chain, the case of
PHILSHOES (not its real name), a manufacturer supplier of one of the biggest shoe manufacturers and
store owners is presented here. The owner of PHILSHOES is a woman entrepreneur who started as a
home-based footwear manufacturer in 1978 .
In PHILSHOES’ production of ladies’ sandals, labor cost accounts for 19-24 percent of the total.
PHILSHOES’ footwear workers are informal workers who are compensated on a piece rate basis.
Depending on the design, upper makers (women workers) get an average of Php 4-6.50 per pair. Those
working in the finishing section, such as those who attach soles, finishers and packagers, get Php 1.00 to
2.00 per pair.
Although both male and female piece rate workers’ earnings depend on their work flexibility, male
shoemakers who receive the lowest piece rate of Php 0.50 centavos per pair can earn as much as Php 500
per day for 1,000 pairs per day due to machine-aided work. Women piece-rate workers, on the other hand,
receive only Php 300-600 pesos per week.
The PHILSHOES owner explained that the reason for maintaining piece rate work is the irregularity of
shoe orders and the abnormal drop in the wholesale price margin of shoes. With the increasing price of
raw materials, PHILSHOES cannot jack up its price since other suppliers will outbid them. From the price
in 2000 (Php 220) to that 2006 (Php 180), PHILSHOES’ elevated ladies shoes has experienced a price
drop of 18.18 percent. Despite increased cost of raw materials, the price of PHILSHOES’ flat ladies
sandals has remained at Php 120 for the last six years.
Adding to these deep-seated problems affecting the shoe industry is the rampant smuggling that
undermines its survival. The unabated entry of shoes, whether legal or smuggled, has led not only to the
abnormal drop in local shoes prices but also to a divided market favoring the low cost shoes from China,
Korea and Taiwan.
19
ibid
Alejandro RR and Fabella CB, Correlation between early Pregnancy Loss and Exposure to Organic Solvents as
presented in “Environmental Threats to the Health of Children: Hazards and Vulnerability” Bangkok, Thailand, 3-7
March 2002. http://www.who.int/docstore/peh/ceh/Bangkok/Bookletpart2MAY2002.pdf As cited, of 82 cases
(32%) of spontaneous abortions, 35 (43%) patients were exposed directly or indirectly to organic solvents, as
compared to 47 (57%) who were not exposed. Of the 35 exposed patients , 7 (20%) were directly involved in the
manufacture of shoes, 20 (57%) were living in the vicinity of shoe factories, and 8 (23%) co-inhabited with shoe
workers. The odds ratio was computed to be4.69 at 95% confidence interval, indicating a high correlation.
20
8
C. Market Chain
Gross Margins Among Marketing Intermediaries21
Manufacturers/Store owners
5-10% mark-up
Manufacturers/ Subcontractors/ Wholesaler/ Supplier
100% mark-up
10-40% mark-up
20-40% mark-up
Department Stores
Boutiques/ Special Stores
100-200% mark-up
Final Consumers
Direct Selling (through retail outlets/ public market)
Currently, the bulk of the footwear industry production is absorbed by the domestic market. Though
manufacturers have various distribution channels, department stores are still the best market.
As seen in the diagram, manufacturers also sell products to wholesalers/traders who are also input
suppliers. Big manufacturer like LARGO (not its real name) are capable of having their own domestic retail
stores and direct concessionaires in big department stores like Shoe Mart.
Currently, LARGO has more than 120 outlets with more than 70 consignors nationwide. LARGO
companies also suffer from lean months that usually fall in August to September and January to February.
In order to cope with the business loss, they provide major product discounts.
Traders, depending on their network capacity, can go from low end retail markets to high end national and
provincial department stores. Some manufacturers who are also traders also concentrate on foreign markets
by contacting retail outlets or by direct selling to Overseas Filipino Workers (OFWs) , and foreign buyers.
It is important to note that only big manufacturers who have direct access to foreign markets have this
capability. However, there is more to learn in sustaining a strong market slot in other countries as
manifested by the closure of LARGO stores in Paris and New York. Currently, LARGO still continues to
export shoes to Japan, Dubai, and United Arab Emirates.
Most footwear manufacturers, like PHILSHOES , concentrate on the domestic retailers and work with
wholesalers/ traders to get their products to the final consumers. As a regular supplier of LARGO,
PHILSHOES creates several shoe designs for approval under the shoe store owner’s quality and pricing
specifications. PHILSHOES admits that customers these days change their style preferences frequently.
PHILSHOES looks into the latest trends of ladies’ sandals to keep their strong position in the shoe store
owner’s group of suppliers.
Aside from being a shoe supplier, PHILSHOES also produces a large range of products which includes
ladies’ shoes, slippers, sandals, flip flops, and small bags. Pricing of products for walk-in consumers is done
through negotiation/agreement. As a business principle, PHILSHOES has learned that it is not enough to
establish good relations with clients; it must also be aggressive in marketing its products.
21
OIDCI 1995 as cited in Morato, Eduardo. “The Shoe Making Industry of Marikina,” Asian Institute of
Management, January 2005 (p.47)
9
Concluding Remarks and Initial Recommendations
In the case of footwear industries struggling under globalizing trends, shifts in trade policies and labor
practices have resulted in the growing informalization of work among women in traditional shoe
manufacturing areas. Being at the bottom of the social and economic chain, women workers have became
vulnerable to the negative impacts of trade liberalization characterized by work flexibility. This means
working longer hours yet getting lesser pay than the male workers who are machine aided, lack of social
protection, and continuous threat of displacement.
With limited opportunities for sustainable income and decreasing purchasing power, most women workers
accept these social and economic vulnerabilities of informal work as better than having no job at all. The
repetitive, tedious and complex manual jobs for women which earn “extra income for the family”
reinforces gender discrimination and inequality as unfair work conditions are considered only secondary to
their primary task in the homes.
As women workers and producers continue to dominate the footwear industry numerically, the need to
identify and promote gender sensitive policies must be recognized. Systematic consultations and organizing
activities to consolidate women informal workers in footwear enterprises should be conducted through
collaborative efforts of local government units (LGUs), NGOs, POs, and other stakeholders. Sustaining
these activities can facilitate greater understanding of the gender related issues in terms of monetary and
non monetary costs incurred by workers as a result of the global shifts in trade policy and labor practices.
Other policy recommendations that have been identified by support organizations like Samahan ng
Magsasapatos sa Pilipinas (SMP) include safeguarding the shoe industry through institutionalizing a quota
system for imported shoes, 35 percent tariff on imported shoes, national government subsidy for research
and development to invigorate the local shoe industry, and anti-smuggling programs.
Marikina Representative Del de Guzman also sponsored Republic Act No. 929022 that provided
government incentives for the footwear industry – tax holidays, BOI and DTI incentives. The rationale for
this law is to hasten modernization efforts through incentives such as tariff breaks to lessen the cost of
equipment and machines.
On the side of business, attempts to upgrade, modernize and develop a niche for their products are
hampered by lack of capital. It is recommended that government should provide financing mechanisms
even to micro businesses, especially to women entrepreneurs, under lenient conditions.
Lastly, civil society’s continuous advocacy and action should be sustained to protect basic workers rights,
women’s rights and national economic interests. The joint advocacy of the Fair Trade Alliance with
Marikina footwear manufacturers as well as its spearheading of activities like “Tangkilikan” will help boost
consumer support of local products. Economic nationalism should not only be expected from the Filipino
consumers but also from manufacturers and storeowners who must also embrace the nationalist principle
of patronizing Philippine-made products, thereby helping to preserve Filipino jobs.
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An Act Promoting the Footwear, Leather Goods, and Tannery Industries, Providing Incentives Therefore and
for other Purposes, approved April 15, 2004. Implementing Rules and Regulations currently under discussion.
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