I Love Taytay: Garments Industry Institutionalization Program
Taytay is considered as the Garments and Woodworks Capital of the Philippines because of the numerous informal and small family-owned businesses that are engaged in garments production and woodworking. Most of these garment producers started their shops on the ground floor or silong of their houses where the family conducts sewing or carpentry work or both.
The LGU noted that only a handful of the small garment businesses are registered with the municipal government. Worse, the few that are registered pay taxes only in the places where the economic exchange of goods is carried out, such as in Baclaran, Pasig, and Divisoria. This meant lower tax revenues for Taytay’s local government.
To address the issue, the various councils, such as the Micro, Small, and Medium Enterprise Development Council, the Tourism Council, and the Local Finance Council, were convened to explore the possibility of formalizing the small garments industry and improve the local economy. The LGU developed two strategies: institutionalization of the local garments market by making Taytay business-friendly, and encouraging the participation of CSOs and NGOs. The LGU also gathered inputs from local business organizations and cooperatives such as the Philippine Chamber of Commerce and Industry - Taytay (PCCI-Taytay), Taytay Sash Contractors Cooperative, Baclaran Garments Producers, Inc., and the Freedom Bazaar sellers.
In 2010, an amendment to Taytay Local Tax Ordinance No. 10 was approved and the Kalayaan Park was opened to encourage small retailers to register with the municipal government to sell their goods; an initial 400 retailers registered. In 2013, a council resolution authorized the Mayor to enter into a lease contract with the Club Manila East Compound for a larger space that could serve as a venue for micro, small, and medium garment manufacturers to sell their products. This venue is now called the Taytay Municipal Tiangge. The vendors are merely required to register with the Department of Trade and Industry, acquire a Barangay Clearance, and obtain a business permit. A total of 1,516 vendors registered during the Tiangge’s opening.
Apart from reforms in business licensing, the LGU granted incentives that entice informal investors to be integrated into the formal mainstream economy. Among the incentives to small businesses are exemptions from the business tax and minimum wage requirements. The small businesses were also bestowed priority status in obtaining business loans from government banks. Free training assistance and market linkages were also provided through partnerships with various government agencies.
The results were encouraging. The municipality reaped a tenfold increase of small business registrants; from only 400 in 2011 to 4,000 by 2015. The collection from special permits also increased from only PhP1,455 in 2011 to PhP409,440 in 2015. Encouraged by the success of its institutionalization program, the municipality hosted a Taytay Business Summit on October 16, 2014 to further assess investor requirements and opportunities and guide the LGU in enhancing an already business friendly environment.