An analysis of how the local manufacturer of polyester staple fiber can beat the competition of its imported counterpart in view of the ongoing import liberalization program
Date
1988-01
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Abstract
The primary objective of the import liberalization program is to improve the competitiveness of the local manufacturers. One manufacturer affected by this program is the Filipinas Synthetic Fiber Corporation (FILSYN) which is the sole producer polyester fiber in the Philippines. Textile fiber is used as input for manufacturing textile yarns which are in turn used to produce textile fabrics which are inputs for garments. The impact of any change affecting polyester fiber is such that it a chain reaction in the textile as well as garment industry.
This thesis aims to find out if FILSYN, based on the latest data available (1986) is ready to face the challenge that the import liberalization program offers. Through the analysis of FILSYN's financial statements and price differentials of the local and imported fiber, this thesis was able to discover a few things.
The study indicates that FILSYN is a fairly stable company which was able to "stabilize" fluctuations in operations through its other activities like international trading or exports, cost reduction program, expansion of the product line and tariff and non- tariff measures and tax incentives obtained in 1986. In 1987, however, non-tariff measures affecting importation of polyester fiber, were finally removed. Based on the findings of the study, FICSYN should find more ways and means to cope with the import liberalization program since the domestic price of polyester fiber is greater than the imported price. And this time, there are no more non-tariff measures to protect the company. The study also suggests that tariff duties be retained at the current 30% for two years just to give enough time for FILSYN to adjust to the change and to find ways to lower-operational costs.
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Keywords
Polyester staple fiber, Local manufacturing, Import liberalization, Import liberalization program, Import