Marikina 2nd District Representative Stella Luz Quimbo called on fellow lawmakers in the House of Representatives to help bring back the lost glory of the country’s footwear industry.
Quimbo made the call in a sponsorship speech for House Bill (HB) 491 or “the Philippine Footwear, Leather Goods, and Tannery Industries Development Act of 2022”.
The veteran legislator said her hometown Marikina City, tagged as the “Shoe Capital of the Philippines”, was once renowned for exporting fine, durable, and elegant shoe products around the world.
Speaking before the House Committee on Creative Industry and Performing Arts, the seasoned lawmaker traced the beginnings of the Marikina shoe industry to Kapitan Moy Guevarra, who in 1887 “reverse-engineered” and disassembled a pair of imported shoes to learn how to make a pair himself.
Guevarra business prospered and his neighbors began making shoes as well.
The local industry, she said, boomed in the 1970s, and she remembered exporting snake-skin shoes to New York and other cities in the United States.
“Ganyan naging tanyag ang sapatos na gawang Marikina. However, when we had to liberalize our economy in the 1990s, there was a massive displacement within the industry,” Quimbo said. “And this is due to the fact that we were not strong enough then to compete against foreign imports.”
By the 2000s, she said the country’s local shoe industry saw intense competition with imported Chinese footwear.
“When the pandemic came two years ago, many shoe business owners, including myself, had to close shop.”
“When the pandemic came two years ago, many shoe business owners, including myself, had to close shop because school kids and office people didn’t need leather shoes anymore, and footwear was not considered an essential business,” Quimbo explained.
She expressed the belief that the footwear, leather goods, and tannery industries are vital parts of the Philippine economy and they have enormous economic potential.
In fact, Quimbo said, from a gross value added of P8.65 billion in 2000, this grew to P15.82 billion in 2019, before the pandemic hit.
However, the figure went down to P11.79 billion in 2020 and further down to P11.64 billion in 2021 due to the pandemic, she added.
Quimbo said the government rightly saw the potential of these industries which led to the enactment of Republic Act (RA) 9290 or “the Footwear, Leather Goods and Tannery Industries Development Act” to strengthen them so that they could fare well in a liberalized economy.
“Kumbaga, sasabak sa laban ng foreign competition ang mga sektor na ito, kaya binigyan ng armas ng gobyerno. Dahil kung walang suporta mula sa gobyerno, tiyak, dead on the spot ang industriya ng sapatos,” she said.
However, Quimbo noted the provisions of the law seemed to have become unresponsive to the needs of the covered industries as time passed by.
RA 9290 was overtaken by events when RA 11534 or the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE) was passed into law in March 2021 because this also provides for the fiscal incentives contained in RA 9290
These issues led her to file HB 491 to promote and support the growth of such industries, especially in footwear.
“We need an industrial policy post-CREATE Law, and this bill paves the way forward. To this end, House Bill No. 491 has provisions on non-fiscal incentives that will complement the CREATE law. For instance, industry players will be given preferential access to credit through low-interest loans from Landbank, DBP (Development Bank of the Philippines), and the Small Business Corp. Other support includes marketing and promotional campaigns, green lane servicing in government transactions, and access to foreign markets,” Quimbo explained.
She saw the importance of promoting import substitution.
“Meaning domestic firms should be able to produce and compete against what we frequently import and eventually export to the world market. This is the economic philosophy behind this bill,” Quimbo said.
“Magandang humabol sa Vietnam na Top 2 exporter ng sapatos sa mundo. House Bill No. 491 is key to this endeavor.”
“Pangarap namin na bumalik ang dating sigla ng Marikina shoe industry, kung saan umaabot sa kabilang dako ng mundo ang ating dekalidad na produkto. Dapat matatag ang industriya ng sapatos sa Pilipinas para hindi na natin angkatin pa ang sapatos na kayang-kaya naman gawin ng Pinoy. Magandang humabol sa Vietnam na Top 2 exporter ng sapatos sa mundo. House Bill No. 491 is key to this endeavor,” she stressed.
Quimbo also said the bill seeks to address the limitations of RA 9290, which has been perceived as benefitting Micro, Small, and Medium Enterprises (MSMEs) only, because the implementing rules and regulations provide that only those considered as small and medium-scale enterprises could qualify for its incentives and programs.
The bill broadens the coverage to promote the development of local industries, including their supply chain, she said.
Quimbo said rebates would be given to those who subcontract MSMEs or procure from bidders who can prove substantial linkage with MSMEs in their supply chain.
Moreover, this measure requires government offices to source their footwear, leather goods, and tannery product requirements from local manufacturers.
“Thus, we need a dedicated fund to implement the proposed programs. This bill creates the Covered Industries Development and Competitiveness Enhancement Fund (CIDCEF), which shall be comprised of the duties and taxes collected from importations of the covered industries that would eventually be used to fund the developmental support and activities under the bill,” she explained.
Quimbo said the bill, once enacted, shall direct the Department of Trade and Industry and other concerned agencies to formulate the Industry Roadmap for Covered Industries to restructure the government’s delivery of support services to them.
A unit within the Board of Investments shall also be created to oversee the implementation of the measure.
“With these provisions, we hope to provide adequate support to the footwear, leather goods, and tannery industries. Marami pong nangangamba ngayon dahil sa taas ng dollar-peso exchange rate. I think we should take advantage of this opportunity to strengthen the covered industries so that they can manufacture quality goods, source inputs locally, and sell them at more competitive prices in the global market, given the present situation. I count on the support of the members of this Committee to revive these industries, which will, in turn, provide more jobs to the Filipinos and boost economic recovery,” she concluded.
