This study is published as a part of the British Council x Fashion Revolution Policy Dialogue
project which aims to shed light on the multiple perspectives of a particular issue througha series of evidence-based discussions, interviews, and workshops. This can lead to abetter understanding of the policies at play and bring about meaningful improvements topolicies. The ultimate goal of the Policy Dialogue is to inform policymaking processes inour respective countries by enabling a wide range of voices to engage in a debate about
the social and environmental impacts of the fashion industry in our country or region.
Authors
Lian Sing
Michelle Esquivias
Researchers
Ysabl Marie Dobles
Ma. Theresa Arigo
Lian Sing
George Buid
Michelle Esquivias
Published by
Fashion Revolution
Philippines
April 2019
Funding support

CONTENTS
Foreword
Executive Summary

13

1. Background of the Study
1.1 Objectives
1.2 Scope and Limitations
1.3 Methodology
2. The Ukay-ukay Phenomenon: Definitions, History, Context
2.1 Global Trade in Second-hand Clothing
2.2 Illegality of Ukay-ukay: Discussing RA 4653 and other related policies
2.3 Ukay-ukay as a billion-peso industry: Economic Implications
2.4 Why Ukay?: Cultural and Social Implications
2.5 Second-hand and Sustainability: Environmental Implications
3. Impact on the local garments industry
4. Policy Recommendations
5. Conclusion

6
7
7
7
8
12
13
20
22
25
28
31
36

Stakeholder Information
Acknowledgements
References

37
39
40

Clothes aren’t going tochange the world.
The women who wear
them will.
- ANNE KLEIN -FASHION REVOLUTION PHILIPPINES

Foreword

Sarah Ditty
Policy Director, Fashion Revolution Global
Fashion Revolution started as a direct
response to the Rana Plaza garment
factory collapse in Bangladesh that killedover 1,100 people on 24th April 2013.
The victims were making clothes for wellknown multi-national fashion brands andretailers. Many of these companies didn’tknow their clothes were being produced
there. We saw this lack of transparency asa fatal flaw of the industry and knew that itneeded urgent change.
We wanted brands and retailers to be
more transparent about where they weresourcing, who was working in their supply
chains and under what conditions.
Since then we have been advocating for
global, systemic change at three levels:
industry, culture and policy. Thus far
our policy change efforts have focused
predominantly on countries in Europe, andas a result, we have helped make somesignificant impacts.
We have seen the UK Modern Slavery Act
pass into law in 2015, which means thatcompanies with operations in the UK
over £36 million turnover must publicly
report on what they’re doing to root out
forced labour in their supply chains. We
were one of the groups that pressured thegovernment to include mandatory public
reporting in the legislation.

In 2015, the European Union launched
the flagship initiative on responsibility
in the garment sector, in which we havebeen involved since its inception. In
fact, I gave evidence to the European
Parliament in April 2017, the day before
the European Parliament took a key voteto pass a resolution that committed theCommission to exploring a number oflegislative interventions and tools. The
resolution passed by 505 votes against 49
with 57 abstentions.
In 2018, the powerful UK Environmental
Audit Committee launched an inquiry
into the impacts of the fashion industry,
which they told us was inspired by Fashion
Revolution. I was invited to testify in front of
the Committee in the Houses of Parliamentand give evidence on the findings ofour transparency research. Many of ourrecommendations to the Committee were
included in their published report.
In February 2019, the German Government
announced that it is planning to take thelead where the European Union has moved
slowly on these issues. In 2020 whenGermany takes up the EU presidency forthe year, they plan to make responsibility
and sustainability in the global garment
sector one of their three core topics.
And now, we seek to explore what positiveand constructive policy change mightlook in other countries where Fashion

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

Revolution teams are doing good work.
This was the ambition of the partnership
between the British Council and Fashion
Revolution through the Policy Dialogue
project.
The research conducted by Fashion
Revolution Philippines into ukay-ukay
will feed into Fashion Revolution’s global
policy advocacy strategy going forward.
The importation of second-hand clothingis an issue affecting countries all over theworld in varied and complex ways, and weare grateful that our team in the Philippines
has embarked on this fascinating journey
to understand more about it. We hope thatthese insights and recommendations
prove useful not just to us but also to
the wider Filipino and global fashion andtextiles industry.

FASHION REVOLUTION PHILIPPINES

Executive Summary
In 1966, the Philippines enacted
RA 4653, an Act that declares it illegal tocommercially import used textiles into
the country. The rationale behind the Act
is to safeguard the health of the Filipino
people from potential health hazards usedclothing may carry, and to maintain the
dignity of the nation by refusing to receive
the discarded items of other nations.
Despite this law, imported second-handclothing (SHC) locally known as ukayukay is widely and openly patronized allover the country. Known for its garment
piles and cramped clothing racks, ukayukay is a source of affordable clothing
for many, particularly those from lower
income groups. Nowadays, ukay-ukay
has transcended its purely practical,
economical appeal: fashion designers andconsumers from higher income groups
have begun to celebrate ukay-ukay for its
uniqueness, sustainability, and even thrill.
The discrepancy between the supposed
ban and the popularity and prevalenceof ukay-ukay raises several questions
that this study aims to shed light on.
Specifically, we focused on the impact
of ukay-ukay on the economic, cultural,social, and environmental spheres ofPhilippine society, with a particular focus
on how it affects the local fashion industry.
In doing so, this study examined theimplementation of RA 4653, inspecting
where it fails and where it succeeds, inorder to formulate recommendations fora policy on ukay-ukay that is relevant,effective, and progressive.

What became evident in our researchis that ukay-ukay is a widely prevalentindustry and cultural phenomenon
because of numerous vested interests:
it answers consumers’ demand foraffordable yet trendy clothing; it opens up
creative possibilities for fashion designers;
it provides Local Government Units (LGUs)
revenue, and; it offers entrepreneurs aneasy, low-cost, and lucrative business
opportunity. Regarding the potential healthhazards of ukay-ukay, our research findsthat most ukay-ukay items do not actually
carry significant microbes. Consumers,
moreover, are willing to take that small,albeit still present, risk because theperceived benefits of ukay-ukay (i.e.
affordability, style, novelty, convenience)outweigh the slim possibility of a healthhazard. Given this, RA 4653’s rationale ofprotecting the health and dignity of theFilipino people becomes irrelevant whenukay-ukay evidently meets the people’s
demands. There is a clear need to revise thepolicy according to the needs of the times.
On the contrary, ukay-ukay also has
negative effects: it is still potentiallyhazardous to public health; it highlights
price as the primary source of value of a
garment; it can be a source of shame forsome people; it is wasteful because ofits mass volume, and; it promotes rapid
disposal of clothing. While ukay-ukay
does have very clear benefits, its negative
effects should not be overlooked.
In the first place, the ukay-ukay industry ismade possible by flawed implementation.
First, the law prohibits the importation of
SHC, so the responsibility to curtail ukayukay falls primarily on the Bureau of
Customs (BOC). But because the current

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

screening or monitoring system is done
manually, the process is vulnerable
to corruption. Accounts of bribing
schemes within the BOC are common,
demonstrating how flawed the systemcurrently is. Corruption aside, suppliers
themselves also utilize different means of
smuggling SHCs into the country, such as
through misdeclaration/underdeclaration,
as donations from NGOs, or as pasalubong(souvenirs).
Because only the importation itself is
prohibited, once the shipments are clearedfor entry, the sale of SHC is technically legal
by all means. It has been raised that the
government’s raiding of ukay-ukay storesis unjust because the retailers legitimately
purchased their inventory and acquired
the necessary business permits from their
LGUs; punishing the retailers does not bringaccountability to the importers who are theones actually committing the crime.
As for ukay-ukay’s impact on the local
fashion industry, our research finds thatukay-ukay is either only a minor threat tothe local industry, or, counterintuitively,
a complementary one. First, these two
industries have different markets, so
ukay-ukay does not compete with thelocal industry for consumers. The declineof the local fashion industry is also often
attributed to the rise of ukay-ukay in the
country, but our research shows that thetwo do not have a causative relationship;
they just happened to occur at around thesame time period. While the SHC tradecertainly played a role in the collapseof the local industry, international trade
agreements and the inability to keep up
with the rapid globalization of the 90s werethe main factors for the local garment
industry’s decline—not ukay-ukay. In otherwords, the claims that ukay-ukay cuts
into the market of the local industry, andin doing so deprives Filipinos of jobs andcontributes to the industry’s decline, are notfounded on any conclusive evidence. One
stakeholder even remarks that, nowadays,
ukay-ukay can be a complementary tool
to the fashion industry because it brings
awareness of different clothing brands
and styles to everyday consumers. From
this awareness, he claims, consumers will
still be lured by the convenience offeredby legitimate retail brands.
While ukay-ukay is not the main reason
for the local industry’s decline, it does,
however, discourage investment in, andthus development of, the local garments
industry because it is easier, cheaper,and more lucrative to invest in ukay-ukayrather than in the local production andmanufacturing of clothing. Ukay-ukay’s
impact on the local industry is thus neither
simply good or bad; the relationshipbetween the two industries is more
complex than it appears.
In light of these findings, our researchteam came up with the following generalrecommendations:
1. Build on the discourse on the local
SHC trade by conducting an impact
assessment of ukay-ukay on the local
garments industry
2. Categorize ukay-ukay by type andquality
3. Encourage appreciation of Philippine

FASHION REVOLUTION PHILIPPINES

garments and textiles through better
education
4. Strengthen local industry throughinnovative solutions based on the
country’s available technology andresources
5. Reduce textile waste through systemic
upcycling/recycling of old and waste
fabrics
Should the policy swing
legalization, we recommend:

towards

1. Strictly regulate the entry of imported
second-hand clothing
2. Impose quota restrictions
3. Tax ukay-ukay

In the case of better implementing thepresent prohibition:
1. Phase out ukay-ukay by category
2. Provide alternative livelihood for those
involved in the industry
Our research cannot, at this point,
definitively say if legalization or a revised
prohibition would best serve the interestsof the nation, hence our recommendations
for either cases. For instance, while thetransparency that comes with legalization
sounds ideal, various stakeholders
consulted for this research believe thatukay-ukay business owners would still try
to conduct their transactions undergroundso as to avoid the burden of taxation.
More dialogues and studies, particularly
quantitative ones, would be necessary to
arrive at a more informed decision. Seeing
how prominent the ukay-ukay industry
has become, what is unquestionable isthat RA 4653 is an outdated law that, for it
to actually best meet the nation’s interests,
requires revisions and further examination.

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

Image: George Buid

1. Background of the StudyIn the discourse on sustainability, buying
second-hand clothing (SHC) is touted asa solution to the excessive production
and consumption in the fashion industry.
Mass production and consumption of
fashion, which is currently the popular
industry model, means that clothes arebeing bought and thrown away at a fast
rate. This results in tons of textile waste
every year: in 2017, it was reported that the
EU textile industry generates textile waste
estimated at 9.35 million tons per year
(Bell et al., 2017). Meanwhile, in the UnitedStates, 10.5 million tons of textiles ended
up in landfills in 2015 (EPA, 2018). Turning
to second-hand clothes is then generally
regarded as the more sustainable option

as it extends the lifespan of garments andkeeps them from turning into textile waste.
However, the impact of buying and selling
second-hand clothing varies across theglobe. For instance, in many sub-SaharanAfrican countries, second-hand clothing
comprises 30% of the total value ofimports, and over 50% in terms of volume(Baden and Barber, 2005). While the SHC
trade here clearly has consumer benefits,
it is said to play a significant role in theundermining of industrial textile/garment
production in the sub-Saharan region
because of the competitive volume of theimports (Baden and Barber, 2005). In thiscase, sustainability is questionable due tothe large volume of SHC regularly being
imported into the country. Meanwhile, in
the UK, one of the most common second-FASHION REVOLUTION PHILIPPINES

hand stores is the charity shop (Statista,2017), suggesting that the SHC circulatingin the country is mostly, if not only,
domestic. The UK’s prominent role in the
global SHC trade aside, as one of the major
exporters of SHCs, the SHC trade in the UK
can be considered actually sustainablebecause of the domestic SHC circulation.
The object of this study is the second-handclothing industry in the Philippines, locallyknown as the ukay-ukay, and the questionof its economic and environmental
sustainability.
In particular, this study aims to examine
the impact of imported second-handclothing on the local fashion industry
by understanding how the the local SHC
trade, colloquially known as ukay-ukay,functions in the first place. Despite thepresence of RA 4653, the law prohibiting theimportation of second-hand textiles andclothing, how come SHC is consistently
imported into the country? Where andwhy are they being allowed to come in?
Where are they usually sold, and who isthe market for ukay-ukay? What happens
to these clothes when they are not bought,
and do we have records of this? In light of
all these, how does ukay-ukay affect the
local fashion industry, if at all?
Through this research, we seek to assessand evaluate the implementation of
RA 4653, identify the stakeholders
and challenges of the ukay-ukay andlocal fashion industries, and provide
recommendations that would overallpromote a more sustainable fashionindustry in the country.

1.1 Objectives
Through this research, we aim to(1) understand the impact of imported
second-hand clothing on the local
Philippine industry by examining therelationship of all stakeholders to the ukayukay industry through a combination ofliterature review and first-hand accounts
from stakeholders, and (2) to assess andevaluate the implementation of RA 4653
and offer recommendations to address the
problems and promote a more sustainablelocal fashion industry.

1.2 Scope and Limitations
While this study attempts to consider
the entire Philippine context, it focuses
primarily on Metro Manila and nearby
provincesregardedasukay-ukay
hotspots, including Baguio, Subic, andClark. Moreover, it should also be notedthat this research is greatly lacking in local
statistics on the ukay-ukay industry. Dueto the illegality of ukay-ukay, there are no
public records of important quantitative
data, such as the exact volume of clothes
being imported into the country daily, andtheir total net worth. In lieu of such data,
this study works with approximations
based on various studies, news reports,
and first-hand accounts.

1.3 Methodology
In developing the study, we reviewed
related literature (such as from the UN
Comtrade and local government reports),
conducted personal interviews with major

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

stakeholders in the industry, and organizeda policy dialogue as well. The dialogue,
which was conducted on 23 February 2019,consisted of 11 stakeholders who engaged
in a structured discussion about theissue in question. The participants in the
dialogue included government officials
from relevant departments, including
the Department of Trade and Industry,
Philippine Ports Authority, Philippine Fiber
Industry Development Authority, and
the Philippine Textile Research Institute;
several designers and brands working withethical and slow fashion, and; academics
who have previously published research
into the SHC trade in the Philippines.

2. The Ukay-ukay
Phenomenon: Definitions,
History, Context“Ukay-ukay” refers to the local industry
that caters to the sale of imported secondhand garments (Abueg, 2005, p. 54). Derived
from the Filipino word “hukay,” meaning to
dig up (Locsin, 2007, p. 371), ukay-ukay is
known to have originated from Baguio City,
where it was also called a “wagwagan,”meaning the act of “dusting off a pieceof clothing by taking hold of one end andsnapping it in the air. The industry earned
this name because of how the items onsale are either simply displayed in large
piles or very tightly cramped clothing
racks, requiring consumers to really dig
through the clothes to find an item theylike. Moreover, the term “ukay-ukay” canrefer to the article on sale, the shop or
venue in which it is bought, or even theevent of buying itself (Abueg, 2005, p. 371).
The used clothing trade in the Philippines

has been active for approximately 50
years, growing right after World War II
due to the UN’s Relief and Rehabilitation
Administration (UNRRA) provision of billionsof dollars in relief to Asia between 1943
and 1949 (Isla, 2014). This industry thenflourished in the 80s (Isla, 2014), when nongovernment organizations (NGOs) “started
selling tax-free clothing as a means to
fundraise” (Ladrido, 2018, n.p.). Diaspora
and migration also played a factor in theflourishing of the ukay-ukay industry, since
it has been studied that “enterprising Hong
Kong-based Filipino domestic helpers
are founders of the industry” (as cited in
Isla, 2014, p. 230). These Overseas Filipino
Workers (OFWs)—specifically women, it
should be emphasized—would acquire oldclothes, whether their personal items orSalvation Army thrift shop finds, and resell
them in Baguio (Locsin, 2007). As Lynne
Milgram illustrates, Filipina entrepreneursin Hong Kong have acted resourcefully in
the SHC industry to construct their own
trade networks. Because of social andeconomic limitations, these women have
had “to carve out their particularizeddomain of middleness [between Hong
Kong and the Philippines] by continuing
to refashion the cultural, economic, and(il)licit parameters of their work,” and indoing so, have created livelihood spaces
for themselves with based on their own
values (Milgram, 2008, p. 39). Since then,Hong Kong’s role in the ukay-ukay trade in
the country has diminished greatly: in theyear 2000, 35% of the imported SHC in thePhilippines came from the United States,and 2.5% were from Hong Kong. 17 years
later, as the sixth top importer of usedclothing in Asia, the Philippines imported
most of its SHC from South Korea (Fig. 1)
with only .15% coming from Hong Kong.

FASHION REVOLUTION PHILIPPINES

smuggled into the country without a
trace (Arranza, 2017).

Figure 1. Primary Sources of Used Clothing, Philippines, 2017

Despite the prohibition, used clothing is said toenter the country primarily through three ways:(1) as relief goods donated through local orinternational organizations; (2) as pasalubong(souvenirs), or; (3) as smuggled goods (Abueg,
2005, p. 73). In an interview, researcher Ma. Rina
Locsin further reports that nowadays most SHC
come from Subic, Clark, and Cavite—three ofthe country’s Special Economic Zones (SEZ).
Because raw material importations within SEZs
are tax-free—provided that the raw materials
within the SEZ are re-exported as finishedproducts—it becomes a location ripe forsmuggling. Locsin reports that either (1) SHC
importers negotiate with Customs officials
for the release of their imports, or (2) locators
within the SEZs misdeclare imported SHCS are
scrap material. Chairman of the Federationof Philippine Industries, Dr. Jesus Arranzaadds misdeclaration at these SEZs as anothermethod of smuggling. For instance, in Arranza’s
investigation, he and his team discoveredthat in one locator’s shipment, the company“underdeclared its importation of 22 metrictons of used clothing to only 10 metric tons,”
allowing the undeclared 12 metric tons to be

Corruption in the Bureau of Customs(BOC) seems to be quite prevalent. In
2014, a Customs official was arrested
for allegedly seeking and accepting a
1.5 million peso (roughly £21,632) bribe
to facilitate the clearance of prohibited
shipment of SHC (Rappler.com, 2014).
Furthermore, according to a 2015
Senate report, BOC insiders describea particular scheme called “5-20”
or “cinco huli, lusot viente” whichmeans that for every 25 shipmentsof SHC, only five are seized, while therest are released upon payment of“tara” or grease money (DefensorSantiago, 2015). Another scheme
called “swing” refers to how some
BOC or port officials, in exchange forgrease money, simply face the otherway as ukay-ukay or other smuggled
goods are carried into trucks waitingat the ports (Esplanada, 2014). As thePhilippine Chamber of Commerceand Industry Chairperson Julita Lopez
observes, “the exercise of discretionon the part of BOC employees on thematter of assessing/ examining ofcommodities is the root of corruption”(Philippine Senate, 2004).
In the present, the ukay-ukay industry
has grown and developed, from“generic street piles in the marketarea” to “more upscale ‘selections’”in business districts, and even to
online stores on the internet such as
eBay (Isla, 2014, p. 230). Interestingly,
Isla points out that ukay-ukay sites
in the Philippines are “geographicallylocated according to class: flea or

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

public markets carrying poorer quality
items for lower classes and upscaleboutiques in business districts carrying
branded and vintage items for higher
classes” (p. 232). An ukay-ukay seller
we spoke with attests to this geographic
differentiation of ukay-ukay. He adds thatdifferent parts of the metro have a known
specialization, so to speak. Some areas
might be known for a certain style basedon the source of the clothing, or based on
the type of items they carry. For instance,
his store only sells shorts and blouses, butthey also offer pants sometime aroundDecember, presumably because the colder
weather would necessitate consumers to
buy warmer clothing. In contrast, he notedthat in Upper Barangka in Mandaluyong
City, another ukay-ukay group sells
Korean-style clothing, a “specialization”
that is instead based on current fashion
trends rather than practicality.
As earlier mentioned, the online migrationof retail has affected the ukay-ukay
industry as well. An ukay-ukay vendor from
Bambang, Manila remarks that business isbeing done more and more through theinternet because it is much faster and,sometimes, more profitable given thatit provides a wider reach to sellers andrequires lower capital. For instance, a quick
search would reveal the website Ukay
Ukay Online (http://ukayukayonline.com),a Cebu-based online ukay-ukay supplierthat provides an easy and convenient way
for anyone in the country to start their own
ukay-ukay stores. Another permutation of
online ukay-ukay manifests in Instagrambased online stores that sell “curated”
ukay-ukay finds, often charged a muchhigher price. These stores acquire theirinventory in different ways: some source

their items by going through different
stores in the metro, while some purchasecheap, trendy clothes in bulk abroad (i.e.
Thailand and Vietnam).
Aside from its platform, the market ofukay-ukay has likewise slightly changed.
Isla notes that the majority of the ukayukay’s market still “belong to lower
income groups,” as affordability remains
the primary motivation for consumption(Isla, 2014, p. 231), but higher income
groups have also began to patronize ukayukay as well. As for those who import andsells ukay-ukay, the now defunct AntiSmuggling Intelligence and Information
Center (ASIIC) Chief Col. Carlos Holganza“revealed that the most nefarious
smugglers are not ordinary criminals but
are instead scheming lawyers and shrewd
businessmen” (Philippine Senate, 2004).
It is clear that the ukay-ukay landscapehas transformed greatly over the years interms of source, market, and platform,
prompting us to reexamine more closely
how it, too, has changed the Philippines.

2.1 Global Trade in Secondhand Clothing
Ukay-ukay is part of the global trade insecond-hand clothing (SHC), an industry
worth billion of dollars each year. In 2017
alone, the estimated value of the global
trade in SHC amounted to 3.79 billion dollars(OEC, 2017). Almost all countries deal in the
SHC trade, with developing countries, suchas the Philippines, Pakistan, and Kenya,
being its major consumers, while somecountries, like the United States and theUnited Kingdom, are the primary exporters.
(Fig. 2).

FASHION REVOLUTION PHILIPPINESFound in the following page is thegeneral value chain of the global SHC
trade as illustrated by K. Raworth in an
Oxfam GB Internal Briefing Note (ascited in Baden and Barber, 2005, p. 7).
We supplemented this information
with data specific to the Philippine
context, which highlights the uniqueand prominent role that diaspora
plays into the Philippine SHC industry(Fig. 3).

Figure 2. Major Exporters of Used Clothing, 2017

Supporters of the SHC industry argue that thetrade creates employment for the receiving
countries, such as in transportation, cleaning,
repair, restyling, etc., as well as providing lowcost clothing for those in the lower classes.
There are also concerns, however, that the SHC
trade could harm the local textile and garment
industries, and the livelihoods based on theseindustries, in these developing countries(Baden and Barber, 2005). This is a notion
we will examine further later in this study.
Moreover, the case of the SHC trade, and theukay-ukay trade in particular, might be similar
to the impact of big fast fashion stores, such as
H&M, Gap, Zara, etc., in terms of sustainability,
since both models make clothing cheap
enough to lead to an overconsumption (andoverproduction) of unsustainable clothing, with
developing countries being the most important(and vulnerable) markets to these industries(Cuc and Tripa, 2014, p. 164). As researcher andBaguio-native Ma. Rina Locsin points out, “thesingle most important driver that fuels the ukayukay trade is the fast turnover rate of fashion in
the world’s capitals, which unleashes a hugeamount of castoffs for the secondary market”(2007, p. 378).

2.2 Illegality of Ukay-ukay:
Discussing R.A. 4653 andother related policies
1.2.1 Global Context
There is an abundance of available
research already done on the laws andregulations implemented in various
countries in relation to the secondhand clothing trade. The United States
Office of Textiles and Apparel (OTEXA)
lists over 40 countries which have
imposed bans on imports of worn
clothing from their country, including
the Philippines, as well as countries
in which fumigation and sterilization
requirements are imposed as analternative or complement to bans.
Other policies are also in place, suchas in Pakistan, where imports mustbe accompanied by a certificate ofcleanliness signed by a physician. In
Liberia, only Liberians are permitted toimport and sell used clothing. Many of
the countries listed, however, allow theimportation of donated used clothing.

13

FASHION REVOLUTION PHILIPPINESFor example, in Brazil, donations areallowable, but subject to non-automatic
licensing. Peru requires prior approval
from certain bodies before receiving
donations of used clothing, depending onwhether they are made to the public or theprivate sector. In Argentina, only donations
to religious or charitable organizations areallowed. (OTEXA, 2018)
More specifically, in East Africa, a ban
on second-hand clothing was imposedby its Heads of State due to the gradualcollapse of local clothing and shoes
manufacturing industries as a result of
the emergence of an informal SHC sector.
This was enacted pursuant to Article 79(b)in the Treaty establishing the East African
Community requiring Partner States to“take the necessary steps in the field ofindustrial development to promote selfsustaining and balanced industrial growth
and to improve the competitiveness of
the industrial sector so as to enhance theexpansion of trade and export of industrial
goods within and by the Community.” Thegoal of the ban was ultimately to boost thecotton, apparel, textile and leather sectors,
which were unable to effectively competewith the presence of SHC in the region(Katende-Magezi, 2017, p. 10).
The implementation of the ban is different
in the EAC Partner States. Several of them
have imposed bans, while some have
only fixed varying restrictions in orderto regulate or discourage further SHC
importation. In Kenya, there are currently
no major laws and regulations thatgovern trade of SHC, except for a ban on
second-hand underwear. The total ban
on SHC was lifted in the country in theearly 1990s, and since then, its inhabitants
have heavily relied on SHC as a source ofaffordable clothing. Because of this, thegovernment has been prevented fromreintroducing the ban despite the collapseof domestic production of textiles andapparel (Katende-Magezi, p. 15). Similar
policies are in place in Tanzania (p. 22). On
the other hand, SHC traders in Uganda arelicensed by local governments to operate,
while working with a 5% environmental
levy on used clothing (p. 18). Similarly, in
Rwanda, procuring entities abide by a duty
increment on SHC.
Interestingly, Katende-Magezi notes that
despite consumers believing the ban to
be a “huge mistake” (p. 28), under the GATT
General Exceptions, it can nevertheless bejustified as a permitted restriction meant
to protect human life and health (p. 30). In
the end, she recommends that a Phased
Approach be applied with respect to theban on SHC. This means that the Statedistinguishes between (1) actual secondhand clothing, and (2) “as good as new”
clothing that are also included in imported
bales, as different “grades” or categories
of SHC. While the importation of actual
second-hand clothing may be fully bannedon the basis of protecting human health,the importation of articles and items
from the second category may be subject
only to restrictions (p. 36). Through thisPhased Approach, a compromise between
protecting human health and addressing
the public demand for affordable clothing
may be achieved.

1.2.2 Local Legal Framework

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

In the Philippines, when it comes to the generalimportation of goods into the Philippines, it is
the Bureau of Customs (BOC) that has primary
jurisdiction. This means that the whole processof importation, which lasts from the time that
goods enter Philippine jurisdiction until the
payment of duties and taxes, is subject to the
exclusive authority of the Bureau, to the exclusionof all other bodies (Ingles, 2018, p. 598) This thenalso means that any importation of SHC done
into the country is within the jurisdiction andcapacity of the BOC.
The present situation of Customs regulation in
relation to the importation of SHC has provento be tricky and problematic. Republic Act
4653, the major law governing the commercial
importation of SHC, makes it “unlawful for any
person, association or corporation to introduce
into any point in the Philippines textile articles
commonly known as used clothing and rags.”(Sec. 1) The rationale behind this enactment isthat the government seeks to “safeguard thehealth of the people and maintain the dignity of

Figure 4. Exceptions to the Prohibition Found in RA 1937 (Tariff
Code of the Philippines)

the nation,” as laid out in the law’s title.
Used and clothing and rags imported
in violation of the law shall be burned
without forfeiture proceedings (Sec.
2). Exceptions to this prohibition arefound in Republic Act 1937, otherwise
known as the Tariff and Customs
Code of the Philippines (Fig. 4).
Thus, although generally banned,
there are three main ways that
second-hand clothing can enter
the country: (1) as donations fromemergency relief organizations notoperated by profit, (2) as “pasalubong”(or gifts or souvenirs), and (3) throughmisdeclaration (Abueg, 2005, p. 73).
For example, a 40-foot container
belonging to Great Circles Trading
was declared as “scales toys andother merchandise,” but was foundto contain used clothing, valued at 7.5
million pesos (Aning, 2013). Smugglers
often use the vague descriptor “othermerchandise” as a scapegoat,claiming that they may or may not be
importing any clothing. The first two
ways are legal. On the other hand, themisdeclaration of goods, as to theirquantity, quality, description, weight,
or measurement is declared illegal
in the country’s Tariff and Customs
Code (as amended by R.A. 10863,
Sec. 1400). Pursuant to this, the Codeactually metes out surcharges andthe seizure of the subject goods incases of misdeclaration.
However, implementation of thesepolicies haven’t been uniform acrossall cases of attempted importationsof the SHC. Indeed, in the past, there

FASHION REVOLUTION PHILIPPINES

have been reports of the BOC seizing balesof used clothing and rags that have illegallyentered the country, which have been later
subject to forfeiture proceedings in favorof the government (DOF, 2014; Almonte,2018). However, many reports have alreadyidentified rampant corruption within the
Bureau of Customs (BOC) as a major factor
in the continued entry of SHC into thecountry despite the ban. Customs officials
are said to be bribed to facilitate therelease of shipment containing smuggled
second-hand clothing, or to simply lookaway. For instance, in 2014, a Customs
official was arrested for allegedly seeking,and accepting, a P1.5 million bribe to clear
prohibited shipment (Rappler.com, 2014).
In other cases, imported SHC items thathave initially been halted by the BOC fromfurther entry were diverted to donation
efforts for calamity victims. In 2009, thenCommissioner Napoleon Morales directed
for confiscated ukay-ukay items to be
donated to victims of the typhoon Ondoy,
via the Department of Social Welfare andDevelopment (DSWD) (ABS-CBN News,
2009). This was also similarly done forvictims of the typhoon Sendong (Aurelio,2018). More recently, President Rodrigo
Duterte has formally adopted this into a
directive, ordering the BOC to coordinate
with the DSWD for these donations (Aurelio,2018).
These instances run counter, however, tothe DSWD’s stance against the donationof used clothes for calamity victims. In astatement released in September 2018,the DSWD reiterated that it “discourages”
these donations “in an effort to maintainthe dignity, health, and well-being offamilies affected by disasters.” (DSWD
Social Marketing, 2018) Secretary Virginia
Orogo affirmed the policy in R.A. 4653,
emphasizing the Department’s “no usedclothing donation” policy, again for reasonsof public safety and encouragement of thelocal garments industry. This is not new,as previous DSWD officials have alreadyspoken publicly about the Department’s
refusal to accept such donations (Junio,2015).
If only to complicate the matter further, theinterpretation of the law varies across othergovernmental entities. In a Committee
Report submitted by the Committees on
Trade and Commerce, and Economic Affairs
during the Thirteenth Congress, it wasnoted that freeports and ecozones in the
country have policies that are inconsistent
with those of the BOC (Committee on Tradeand Commerce, 2005, p. 20). The Philippine
Economic Zones Authority (PEZA) and the
Clark Development Corporation (CDC) do
not allow the registration of locators whose
proposed activity involve importation of
SHC. On the other hand, the BOC opinedthat the entry of SHC into these zones does
not constitute importation, since thesezones are outside customs territory (p. 21).
Some lawmakers have tried passing bills
repealing the law. In 2010, movements
were made by Alvarez to discuss proposalsof legalization with lawmakers (Macairan,2010). In 2011, then Representative Reynaldo
Umali authored House Bill No. 5188
(Bundang, 2011), pushing for the legalizationof the importation of SHC. Umali, a former
Deputy Commissioner from the BOC,
proposed an ad valorem tax to be imposedon every commercial importation of used

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

clothing into the Philippines (H.B. 5188, Sec.
3). This tax was to be paid by the importer
prior to the release of the goods from
BOC custody. In addition, like the policies
enacted in the EAC mentioned above,
Umali exempts the importation of usedclothing that are for the sole use of victims
of natural calamities and disasters fromsuch duties (Sec. 4).
During the 16th Congress in 2014, House
Bill No. 4055 was filed by then Cagayan de
Oro Representative Rufus Rodriguez andAbante Mindanao Representative Maximo
Rodriguez, Jr., which also seeks to legalize
SHC importation. According to them, thecontinued illegal importation of secondhand clothing—untaxed—causes a lossof profit for the government. By legalizing
SHC importation, they claimed that an
estimated P700 million could be earned
by the government in tariffs and duties. In
addition to this, Rodriguez and Rodriguez,
Jr. highlight the jobs that are created within
the ukay-ukay industry (H.B. No. 4405,
Explanatory Note).
On the local level, a proposal to legalize
ukay-ukay has naturally come up in the
Baguio City council. In 2015, Councilor
Tabanda pushed for legalization, claimingthat the safety and health hazards claimedby the law have not been conclusively
proven, and that ukay-ukay has become amajor source of livelihood and tourism forthe city (Rillorta, 2015). Despite these efforts,
R.A. 4653 remains unrepealed, and thus,
still the governing Philippine law when it
comes to the importation of second-handclothing.

In sum, although Philippine policy is notconsistent in its ban on the importation of
second-hand clothing, it is apparent thatit has not been uniformly and consistently
applied. In the end, although alreadysubject to a ban placed 53 years ago, SHC
importation into the Philippines continues.
Furthermore, interpretation and receptionof government officials vary. Some believethat the original rationale of protecting
the people from hygienic hazards is still
a compelling state interest, while somebelieve that legalization at this time makes
the most sense, given the continued
growth of the ukay-ukay industry in the
country. In light of the present situation,
it may be worthwhile to look into different
approaches in regulation and restriction,by comparing the Philippine policy modelwith those of other states.

2.3 Ukay-ukay as a Billionpeso Industry: Economic
Implications
While ukay-ukay clothes are known to becheaper than their original counterparts,
the net worth of used clothes seized in
the recent years is far from cheap. In 2015,
the Bureau of Customs (BOC) discovered
and confiscated 21 containers of usedgarments in Misamis Oriental; estimatedto be worth P52.5 million ($1.02 million),and known to be the “biggest seizure ofused clothing” (Gavilan, 2017). In the same
year, they have also intercepted usedclothing worth P52.5 million at the Port of
Cagayan de Oro (Santos 2015). In the past
year alone, 2018, 2.1 million worth of usedclothing was confiscated at the Manila

Image: George Buid

22

THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINESInternational Container Port in April, while
P800,000 worth of ukay-ukay was foundand destroyed by Customs in Guiguinto,
Bulacan (“Misdeclared goods”, 2018;
Barcelo 2018).
Considering the worth, production (andconsumption) rate, and popularity of
the ukay-ukay, there has been a moveto argue for the legalization of ukayukay importation. In terms of taxation,
the government could benefit from theestimated P700 million ($14 million) intaxes annually from imported secondhand clothing, according to then Cagayan
de Oro Representative Rufus Rodriguez andAbante Mindanao Representative Maximo
Rodriguez, stated in the explanatory noteof House Bill 4055 during the 14th Congress(Gavilan, 2017). Unfortunately, this bill did
not push through.
In terms of livelihood, the ukay-ukay
industry belongs to the Philippines’ informal
sector, which, in 2016, contributed P5.013
trillion—more than a third of the total—tothe country’s GDP. In particular, industry
in the informal sector, to which ukay-ukay
belongs, contributed P1.4 trillion (Ordinario,2017). The latest Labor Force Survey also
reports that 15.6 million Filipinos, or 38%
of the country’s working population, areemployed in this sector (Gavilan, 2018). It
has been pointed out, interestingly, thatin the Philippines, there is a significant
blurring of the line between the formal andinformal economy. Technically speaking,the informal sector consists of enterprises
not registered or formally approved byauthorities and not recorded in official
statistics. However, a study supposedly
found that in Metro Manila, 77.4% of suchenterprises were actually legally registeredwith their respective local governments
or agencies (cited in Isla, 2014, p. 234). So
while ukay-ukay operates largely as an
informal enterprise, many of its storesare legally registered businesses that
contribute their fair share of taxes to thegovernment. Evidently, ukay-ukay plays animportant role in the Philippine economy
both as a source of government revenue
and a source of livelihood for a significant
percentage of the population.
In general, most arguments for legalization
are hinged on the fact that it can generate
more jobs and income for Filipinos andthe Philippine government (Gavilan, 2017;
Macarian, 2010). From this purely economic
perspective, it is undeniable that ukayukay has clear benefits, but these stillneed to be weighed against its impact onother aspects of Philippine society.

2.4 Why Ukay?: Cultural andSocial Implications
Ukay-ukay’s threat to public health isanother major concern brought up by
several stakeholders and declared by
RA 4653 itself. Regarding the sanitationof ukay-ukay, a vendor claims that their
supplier from abroad is responsible forthe cleanliness of the clothing. Meanwhile,according to Dr. Joanri T. Riveral of the
Department of Health (DOH), ukayukay items have to undergo a processof decontamination by the Bureau of
Customs (BOC). However, dermatologist Dr.
Dana Ruiz claims that the fabric of ukayukay clothes and the chemicals used toprocess or sanitize them may cause skin

FASHION REVOLUTION PHILIPPINES

diseases, trigger allergies, or cause atopic
dermatitis (Chan, 2012).

through the chemicals used to sanitize theused clothes.

Two officers we interviewed from the
Department of Trade and Industry evendescribed the purchase of ukay-ukay as“degrading” because of its threat to healthand hygiene. Meanwhile, the stakeholders
who patronize ukay-ukay express thatthey are aware of the health hazards, but
the risk does not keep them from buying
these clothes. What they do is simply
wash their finds before using them: someshared that they perform a more thoroughcleaning process (i.e. soaking the clothes
in boiling water before throwing them into
the laundry) while some remarked thatthey wash them normally.

Despite the potential health risks—which,as pointed out, has not been conclusively
proven—ukay-ukay continues to be widely
utilized as it addresses a fundamental
need: access to affordable clothing. A
known supporter for the legalization ofukay-ukay, Baguio City Mayor Mauricio
Domogan emphasizes that the ukay-ukay
industry is beneficial not only to the LGU
through the revenue the industry brings,
but also to the poor. The industry provides
them livelihood opportunities and a
reliable source of affordable clothing.

In 2016, students from the Adventist
University of the Philippines conducted a
research looking into bacterial and fungal
pathogens on second-hand clothes
from ukay-ukay stores in Tagaytay andactually found that most types of clothingfrom ukay-ukay contained no significant
pathogens (Briones et al., 2016). This study
was motivated by the need to conduct local
research on the health hazards of secondhand clothing because of related literatureof other countries like Kenya and theUnited States showing that second-handclothes contained significant microbe
levels harmful to human health. While thesample size of this particular research islimited only to a small area, this finding
disputes the widespread notion of ukayukay being a carrier of disease. But as Ruiz
pointed out, ukay-ukay can still cause skinirritations or allergies without carrying any
microbes but through the fabric itself or

It must also be noted that the popularity of
SHCs and ukay-ukay goods are not only
accounted for by its fulfilment of economic
practicality, but by social and identity
construction as well. Both Hansen (asquoted in Isla, 2014, p. 226) and Isla point out
that clothing desires are just as importantas the satisfaction of basic clothing needs,
with retailers and consumers refashioning
imported SHCs “to construct their personaland collective identities, display theirknowledge of wider clothing practices, andsubvert their received meaning” (Isla, 2014,p. 227). Ethical brand founder Monica Vivar
is of the same opinion; to her, ukay-ukay isempowering because it enables Filipinos
to express themselves however they wantthrough clothing that is affordable andunique. Similarly, Locsin remarks that“ukay-ukay’s affordability allows people toactually live what they used to fantasize”(2005, p. 379). A survey finds that the fact thatukay-ukay provides a variety of clothingstyles for “the thrill-seeking and fashion-

23

Image: George Buid

FASHION REVOLUTION PHILIPPINES

forward young consumers” emerged as
the second most positive quality identified
by consumers with the knowledge of RA
4653 (Dela Cruz, 2018, p. 43). Designers weinterviewed also expressed that ukay-ukay
has the potential for experimentation andinnovation, thus making them a valuable
source of creativity for today’s designers.
It appears that, presently, ukay-ukay has
a positive reputation premised on theaffordability and uniqueness that it offers.
However, ukay-ukay was not always sociallyacceptable, much less empowering. In
its first few decades, buying ukay-ukay
was considered embarrassing and evenshameful; no one would comfortably
divulge that their clothes came from ukayukay. Going back even further, researcher
and professor from the University of thePhilippines Baguio Ma. Rina Locsin eventhinks that the lawyers who drafted RA 4653
in 1966 must have had a superficial notionof shame, likely because that generation
was embarrassed to use second-hand
items. Now, however, she says that the
younger generation has “repackaged
everything”: from calling it second-handto pre-loved.
Given this, it appears that ukay-ukay has
gained not just economic, but also cultural
significance over the years. RA 4653 seems
to no longer represent the opinions andneeds of the majority. It is because of thiseconomic and cultural significance thatukay-ukay has developed a strong footholdin the country, and this is a factor that any
policy change needs to be sensitive to.

2.5 Second-hand andSustainability: Environmental
Implications
Consumption of second-hand clothingis generally considered a sustainable
alternative to buying brand-new clothes
as it promotes the recirculation of existing
garments rather than encourage theproduction of new ones (Norris, 2012).
However, this is a claim that warrants
inspection given that the Philippines
imports tons of SHC every year, which isakin to importing brand-new clothes interms of volume. While no specific numberof tons are documented, the UN Comtraderecords the SHC imports of the Philippines
in 2017 to amount to $43.3 million (OEC,2017), which is not yet considering thoseimports that remain undocumented.
Given this large amount, there is then thequestion of what happens to the SHC that
does not get sold.
According to a 2017 Senate report on
Philippine Solid Wastes, recyclable wastes,of which textile is a part, comprise 28% of
the total solid wastes in the country, second
only to the 52% of biodegradable waste(Philippine Senate, 2017). Unfortunately,
there is no available data breaking down
the components of recyclable wastes, so
the exact percentage of textile waste is
uncertain. The report also mentions that
open dumping remains the most common
way of waste disposal in the country; thenumber of controlled dumpsites andsanitary landfills are currently still very
limited. Because of the lack of proper
disposal technologies in the Philippines,
the high volume of second-hand clothing

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

contributes significantly to environmental
pollution (Cuc and Tripa, 2014).
Interestingly, our research found that ukayukay is recirculated and recycled as muchas possible, with very little of it ending up in
landfills. According to first-hand accounts
from various stakeholders, the sellers’“disposal” process of ukay-ukay generally
follows this path: if the clothes do notsell within a couple of months from theirarrival, prices are lowered. This is the point
where items are open to bargain. If theyremain unsold even then, the clothes are
moved to a different store or location suchas Bambang in Manila, which is regarded
as the “Mecca of ukay-ukay.” If that still
does not work, stores then offer theseunsold clothing as “take all,” meaningcustomers can take the bulk of items fora cheap price. Some stores even pack theclothes and simply leave them out on thestreet for anyone to pick up. The last resort
would be turning these unsold clothes into
rags (Fig. 5).
This disposal process of ukay-ukay
garments show that it takes a long time
for these clothes to turn into textile waste.
In general, many stakeholders observethat Filipinos generally do not throw
away clothes. Old, unwanted clothes areeither passed down to relatives, hoarded,
donated, sold, or “used to death” as rags.
From their testimonies, it appears thatclothing is not perceived as something
disposable by many Filipinos; the habit ofreusing, recirculating, or hoarding usedclothing seems to be a common practice.
This, however, seems to have changed
with the younger generation. A 2017 survey
conducted by YouGov finds that 65% ofFilipino adults have thrown away clothes in
the past year, while 24% reported to havedisposed of more than 10 items in the same
period. Interestingly, the survey also reveals
a behavior disparity between millennials
and baby boomers: millennials are more
likely to sell their clothes online (16% to the
4% of baby boomers), while baby boomers
are more likely to donate their clothes tocharity (63% to the 47% of millennials), or
pass them on to friends and family (80%compared to 70%). Relating these results
to the presence of fast fashion, YouGov’s
Head of Omnibus notes that their “survey
highlights just how many clothes go towaste each year in the Philippines. Looking
ahead to the future, there is a worrying
trend among millennials; their propensity
to dispose of clothing at a faster rate thanolder generations suggests that there is an
uphill battle ahead for those keen to tackle
this issue head on” (YouGov, 2017). While thissurvey is in no way representative of theentire demographic of the Philippine, oreven a regional, population because it was
only conducted online for 10 days, it still
provides insight into current, prominent
behaviors towards clothing disposal. As
YouGov mentions, the increasing rate ofclothing disposal can be connected to
fast fashion, and thus to ukay-ukay as
well, as the two have been likened for
how their affordability can encourage
overconsumption (Cuc and Tripa, 2014)
and, accordingly, a higher rate of clothing
disposal.
What is clear is that regardless of the rateof disposal, whether it be high or otherwise,
the Philippines needs to establish better
disposal and recycling systems for textile
given the volume of it being imported andcirculated in the country.

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

3. Impact on the local
garments industry

Figure 5. Ukay-ukay disposal process (retailers POV)In arguments against ukay-ukay, its
negative effect on the local garments
industry is often brought up, but how
exactly one affects the other is not detailed.
In this paper, the local garments industry
refers to all locally-made clothing whether
for export or domestic circulation, and thepresence of ukay-ukay is said to threaten
the production and distribution of theseproducts. A representative from the largest
new clothes retailing group in Zimbabwe
remarks: “People are buying clothes fromsecond-hand markets, so obviously it
has to be affecting us [...]. If second-handclothes weren’t there, then they probably
would have used that money at Edgars— we are losing out” (cited in Field, 2000,
p. 250). One of the core reasons RA 4653
itself was enacted was to protect local
industries from the used clothing trade.
Iloilo representative in 2013 Janette Garin
expressed concern about the increasing
number of ukay-ukay stores because
she claims that this industry takes away
jobs from people who depend on making
clothes for a living (“P700-M taxes”, 2010).
A local article on the ukay-ukay industry
also reports that “The Federation ofPhilippine Textile Industries was also
worried that the ukay-ukay trade would
affect the businesses of legal garment
manufacturers,” (Ladrido, 2018) but it isn’t
specified in what form that effect would
take. Furthermore, as earlier mentioned,
Abueg (2005) states that “Philippinemade textiles and garments are said tobe 30 percent more expensive than theircounterparts in the market,” but this fact initself, while suggestive that the affordability

FASHION REVOLUTION PHILIPPINES

of ukay-ukay might compete with themarket of local textiles and garments,
does not show causality. How the ukayukay trade contributed to the decline of thelocal garment and textile industry is thus
unclear, especially because the available
quantitative data are unable to illustrateaccurately the economic impact of ukayukay.
For instance, the recorded annual valueof imported SHC in the Philippines in 2017
amounted to $43.3 million (OEC, 2017),
which is roughly P2.15 billion. But in March2017 alone, P500 million worth of ukay-ukay
was reportedly seized in Pasay City by the
Bureau of Customs (Macairan, 2017). Already,this seized inventory alone is about a fourthof the supposed importation of ukay-ukay
for the entire year. This discrepancy provesthat the official statistics fails to account fornumerous transactions conducted illicitly,
all of which are crucial in constructing acomprehensive picture of the industry.
Brooks and Simon, in their 2012 study of
the relationship between the SHC industry
and the African clothing industry, explain
it succinctly: “Because of underlying
weaknesses in the data, it is not possible
to prove conclusively whether there is acausal relationship between used clothingimports and manufacturing decline using
economic modelling” (Brooks and Simon,
2012, p. 4). Likewise, for us to better evaluate
ukay-ukay’s impact on the Philippine
clothing industry, their relationship mustthen be inspected beyond the purely
economic perspective.
The Philippine garments industry was once
known as a sunrise industry: in the 1990s,
the country’s garments and textile export

sector used to be a US$3 billion industry,even regarded as one of the top performing
sectors both locally and internationally.
But “with the challenges brought by theend of the Multi-Fiber Agreement (MFA)
which grants preferential tariffs to thecountry’s exports of garments and textiles,
we saw a decline in the sector’s general
performance” (BOI, 2018). He explains thatthe crisis of the garments industry was
actually preceded by the collapse of the
textile industry, citing the following as thecauses for the collapse:
the failure of many ageing textile firms tomodernize, the failure of the World Banksupported textile modernization program totake off in the 1980s, the amazing absenceof productive linkages between the homeoriented textile industry and the export-oriented
garments industry, the non-development of a
local fiber industry (natural and synthetic), thedisplacement of the locally made textiles by
the “surplus” imports of the duty-free garments
producers, the unchecked smuggling of
untaxed imported textiles and yarns, andthe general lack of preparedness of the local
textile producers for the World Bank-led tradeliberalization program of the l980s and l990s(Ofreneo, 2011).

Given this, along with the fact thatukay-ukay is said to have started in the
80s (Isla, 2013), it seems that the local
industry’s decline around the late 90s
roughly coincided with ukay-ukay’s rise toprominence in the country. Ofreneo lists“the “surplus” imports of the duty-freegarments producers” and “the unchecked
smuggling of untaxed imported textiles
and yarns” as two causes for the collapseof the local textile industry. These two

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

could pertain to ukay-ukay, thus showing
a link between the two. However, the extent
of ukay-ukay’s effect on the industry
is indefinite, and given the other listed
factors, it is clear that this was not the main
reason for the local industry’s decline. As
Isla (2013) points out, most industry experts
deny that ukay-ukay has cut into theincome of legal garment manufacturers.
Instead, they believe the decline is due toother factors, such as “tougher conditions
in export markets, failure to invest in new
manufacturing technology, lack of upto-date machinery and basic industry
start-up capital, failure to restructure theindustry into larger manufacturing units,
inadequate provisions for the training ofworkers, and poor incentives for workers”(Isla, 2014, p. 235-236). It might be more apt
to view the situation as concurrent rather
than causal: the decline of our local textile
and garment industries just occurred at
the same time the ukay-ukay trade thrived.
For instance, Bernie Liu, president andchief executive officer (CEO) of local
retail company Golden ABC Inc., evenclaims that ukay-ukay trading is actually
a complementary tool to the apparel andgarment industry because the mainstream
consumers that purchase from ukay-ukay
become educated on the latest fashion
and brands. He says that ukay-ukay “didaffect us for a while. But, in the long run,shoppers are still lured to the convenienceoffered by legitimate apparel retailers,
especially for women, wherein shopping
is a therapy for them” (Dagooc, 2009).
Furthermore, other studies have noted that
SHC does not compete with locally-madegarments because they do not produce
equivalent competing goods, and thus

have different markets (Baden and Barber,2005).
This correlates with the results of asurvey conducted by Abueg (2005, p. 63)
wherein more respondents said theywould choose brand new clothes overukay-ukay if both were priced equally, or
if they had additional income for clothing
consumption. Several studies have shown(Isla, 2013; Abueg, 2005) that while more
affluent Filipino consumers can choose
to participate in ukay-ukay, the majorityof used clothes shoppers belong to lower
income groups, demonstrating thatpractical considerations (i.e affordability)
remain the primary motivation for ukayukay consumption. This reveals that ukayukay does not actually compete for the
primary market of legitimate garment
manufacturers and retailers, which are thehigher income groups that can regularly
afford to buy from such stores. Those whohave the capacity would generally prefer
to purchase brand new because of its
convenience and cleanliness.
What becomes clear is that ukayukay does not compete with the local
garments industry in terms of market.
Either consumers just purchase what is
the most affordable, regardless if it is newor second-hand, or the market of either
industry is simply different. However,from the entrepreneur’s perspective, thepresence of ukay-ukay seems to affectthe local garments industry in how theformer discourages investment in, andthus development of, the latter. Why
would an entrepreneur looking to makea profit choose to source, produce, andmanufacture their own products when it

FASHION REVOLUTION PHILIPPINES

is easier, cheaper, and more lucrative tosimply manufacture imported clothing? In
our interview, Celia Elumba, Director of thePhilippine Textile Research Institute (PTRI),
explained that when duties were lowered,it became much easier and cheaper toimport clothes rather than produce andexport them. There was then no compelling
reason for entrepreneurs to invest in thelocal garments sector. Furthermore, sheremarks that because Filipinos in generaltend to opt for the cheapest option, thevalue of garments in terms of craft andlabor is often overlooked.
Given this, it appears that ukay-ukay’s
impact on the local garments industry is
not purely beneficial or detrimental. On
one hand, it has been established that themarket of ukay-ukay is different from thatof the local garments industry, so there isno significant competition between them.
Those who have the economic capacity topatronize the relatively more expensive
locally-produced garments generally still
prefer to buy brand new for its cleanlinessand convenience; the presence of ukayukay does not change that preference.
On the other hand, investment in the local
garments industry is discouraged because
manufacturing ukay-ukay offers a lowcost, high-reward alternative to locallysourcing and producing their products,
and in this way, ukay-ukay can be seen
as negatively affecting the local industry.
If the objective is to protect and develop
the local garments industry, it seems that
simply banning ukay-ukay is a short-term
and ineffective solution that is not attuned
to the nuanced relationship between thetwo industries.

4. Policy Recommendation
As our research has shown, the ukayukay industry is the intersection ofnumerous issues: economic, with regards
to international trade, taxes, duties, aswell as a source of livelihood for manyin the country; cultural, with regards toidentity construction and empowerment,
and; environmental, with regards to waste
management and recycling/upcycling/
repurposing.
In light of our findings, we propose
the following recommendations withthese objectives in mind: to promote
the development of the local garments
industry and the utilization of our own
local products; to empower the nationand its people by refusing, or at least
regulating, the importation of secondhand clothing while providing alternative
sources of livelihood for those alreadyinvolved in the industry, and; to encouragesustainability by shedding light on the links
between the domestic and international
fashion industry, and our environment,
and formulating policies that respond to
the issues that arise in these connections.
The following recommendations are
premised on the fact that despite theillegality of the importation of secondhand clothing, the ukay-ukay industry isa socially accepted and large, revenuegenerating industry upon which many
people depend on for livelihood. It is thisreality that changes in the policy must
wrestle with.

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

General recommendations
1. Build on the discourse on the local
SHC trade by conducting an impact
assessment of ukay-ukay on thelocal garments industry
All participants in the dialogue agreed
that the law needs to be revisited;
whether SHC importation should be
legalized or kept illegal is, at this point,
still up for debate. For instance, several
stakeholders—particularly
academics
and vendors themselves—have noted thateven if ukay-ukay is legalized, owners
and vendors would most likely still
conduct their transactions undergroundin order to evade the taxes and duties
that would then come with them. On theother hand, simply banning them, as thepresent law does, is evidently ineffective
because of flawed implementation.
Revisiting simply means that we examine
the 1966 law against the current Philippine
context in order to assess how it canbe made more relevant and effective
in attaining its goals of protecting theFilipino people from health hazards andsafeguarding the nation’s dignity. Our
research, which has already highlighted
the shortcomings of the present law withregards to achieving its objectives, has only
scratched the surface of the issue; further
quantitative studies by the government
or other organizations and individuals
would be necessary in painting a morecomprehensive picture of the present
situation.

2. Categorize ukay-ukay by type or
quality
Ukay-ukay indiscriminately refers to allimported used or second-hand clothing.
Numerous stakeholders pointed out,
however, that it might be necessary tocategorize ukay-ukay by quality as thesewould allow us to formulate a policy thatis nuanced and specific. As describedearlier in this study, individual efforts byonline and offline ukay-ukay retailers
already perform a sorting process thatcategorizes or curates the item based on
different factors, such as source, item
type, and quality, but institutionalizing
this sorting process may prove to beadvantageous in the formulation of abetter, more relevant policy. For instance,banning the importation of ukay-ukay on
the basis of health reasons might appear
misinformed if the clothes being imported
are actually overruns or unused, goodas-new second-hand items. On the other
hand, while it would probably be best not toimport rag-like clothing for sale as ukayukay, its importation could be considered
for other reasons (i.e. as raw material).
3. Encourage appreciation ofPhilippine garments and textiles
through better education
During the policy dialogue with thestakeholders, the group unanimously
agreed that the challenges faced by our
local textile and garment industries boil
down to research and education—on
the consumers’ end, unlearning certain
notions and behaviors, such as basing thevalue of an item purely on its affordability
and idolizing foreign brands and styles,

FASHION REVOLUTION PHILIPPINES

is an important step to promoting thedevelopment of our local industries.
Several stakeholders emphasized theimportance of bringing awareness aboutclothing—its source, producers, anddesigners—so that consumers will be able
to appreciate the item beyond its price tag.
The Department of Education would playa crucial role in this matter, along withdifferent media platforms that encourageand normalize particular cultural values.
Incorporating the study of Philippine
textiles into the curriculum with the helpof the National Commission for Culture
and the Arts, for instance, would instillawareness and appreciation of this aspectof our culture in students early on.
4. Strengthen local industry throughinnovative solutions based on the
country’s available technology andresources
On the producers’ and retailers’ end, thepotential to distinguish the industry liesin developing technologies for recycling/
upcycling/repurposing
usedtextilesalong with finding a competitive edge
for our industry, as cost and volume
seem to be out of the question. We mustcome up with a different approach topromote our local products, one thatproperly accounts for all the cultural andeconomic factors of our present reality.
Philippine Textile Research Institute (PTRI)
Director Celia Elumba raises the argumentthat the Philippines cannot and should
not play “catch up” with other countries
like Bangladesh, Vietnam, and India,
with regards to the volume of textile andgarments produced simply because wecannot compete in terms of manpower.
Instead, she suggests that we focus
on what the Philippines has, including
thousands of handloom weavers inlieu of commercial skill, along with anabundance of natural raw materials that
simply need to be extracted and converted
into textile. For example, Elumba suggeststhat the Philippines capitalize on abaca
and vegetable fibers, which we have anabundance of, rather than on cotton,
which is a trade dominated by four majorcountries: US, India, Brazil, and Australia(Bueno, 2018). Guided by a vision of aPhilippine textile industry based on
ecosystems—wherein local communities
are involved, and “waste” is reused
rather than simply disposed of—the PTRI
promotes and researches the innovativeuse of natural and indigenous sources for
textiles for the benefit of micro, small, andmedium enterprises and communities in
the country. While the Philippine textile andgarments industries still have a long way togo, the small steps taken by the likes of PTRI
pave a path towards a sustainable, circular
economy that we can follow. One way ofintegrating ukay-ukay into this sustainableeconomy would be to consider using it as
raw material for our products, along with
innovative uses of other natural resources.
5. Reduce textile waste throughsystemic upcycling or recycling ofold and waste fabrics
Textile waste needs to be addressed either
through better waste management or
through a systemic upcycling/recyclingof old fabrics and garments. Moreresearch into how to dispose of fabrics

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

needs to be done, since different fabrics
require different methods of disposal or
degradation. In relation to the previous
recommendation, it was suggested during
the dialogue to explore the possibility ofrecycling/upcycling/repurposing
SHC
into new products, since there seems to
be an overabundance of the material in
the country. Doing so would encouragesustainability by giving the excess SHC
or textile “waste” another life. This is asystem already being practiced by somecompanies in Scandinavian countries.
For instance, Finnish company Globe
Hope designs and manufactures products
from recycled and discarded textiles
and uniforms (e.g. from the army),
advertisement banners and flags, oldsailboat sails, car seatbelts and vintage
textiles (such as curtains, tablecloths andbedsheets). Reportedly, the company’s
turnover in 2012 was 1.4 million Euros(Palm et al., 2014), proving that there is amarket for companies engaged in such abusiness.

In the case of legalization:
Recommendations towards theelimination of SHC

1. Strictly regulate the entry of imported
second-hand clothing
Should the importation of SHC be legalized,
its entry into the country should certainly
be well-documented and regulated. One
way this can be done is by funneling theimportation of used clothing to specificports only, as this would make monitoringsignificantly more manageable for the
involved regulating bodies. The records
kept would also serve as vital information
for further research into the industry.
However, as an archipelago, the Philippines
has numerous “back doors” through which
smuggled goods can enter. Giving thischallenging circumstance, it might beeffective to perform random inspectionsof container vans/shipments under thesupervision of an interagency committee
dedicated to monitoring the importationof ukay-ukay. Implementing these strict
regulations would certainly be costly, butwith revenue coming in from the taxationof ukay-ukay, the interagency committee
can funded by the revenue from thosetaxes.
2. Impose quota restrictions

Given that one of this study’s main
objectives is to promote local industries,
these recommendations in the case oflegalizing the importation of SHC in thePhilippines are still oriented towards
severing the country’s present dependency
on ukay-ukay. Legalization—with theassumption of effective governance—
allows transparency, and addressing theissues posed by the importation of SHC
would be more effective if the process istransparent.

The government should impose a quota
restriction on the importation of SHC basedon the extent to which local industries
can meet the demand for clothing in the
country, which can be determined by an
impact assessment. Setting a limit would
keep the competition between imported
SHC and locally-made clothing fair toboth. Allowing the controlled entry of SHC
promotes trade with other countries

FASHION REVOLUTION PHILIPPINES

while supporting and protecting local
production.

In the case of prohibiting ukay-ukay:
Recognizing the persistence of SHC

3. Tax ukay-ukay

It is evident that simply banning
the importation of SHC or ukayukay is ineffective because, given its
current economic, cultural, and social
significance, people continue to find ways
to establish and promote the industry
despite the prohibition. A simple banclearly does not serve the interests ofmost of the stakeholders of the industry,so if the government wants to implement
the ban effectively, it is important that theytake into consideration the needs anddemands of the industry’s stakeholders
within the dynamics of the present context.

Imported SHCs should be taxed to almost
match the price of brand-new, locallymade clothing. If this happens, the market
will likely shift towards the brand-new
items if they cost the same (Abueg, 2005,
p. 64). The risk, however, is that the brandnew items consumers would patronize
would not be locally-made products, butinternational fast fashion brands which
are even worse in terms of environmental
footprint. Given this, it must be emphasizedthat the Philippine educational systemitself, along with various other cultural
apparata, must make sure to promotelocal products. It is observed that becauseof the pervasive Filipino colonial mentality,a result of centuries of colonization,
Filipinos still tend to champion anythingforeign, and to instinctively reject local
products that are deemed inferior(Garbones, 2016). This is a deeply
embedded cultural trait that Philippine
education and media must fiercely resist.
This taxation would also be a burden mostly
to lower income groups who rely on theaffordability of ukay-ukay, so this taxation
should not be implemented without
having made alternatives available. Thisaction point should be done alongside thestrengthening of the local industry which
would then be responsible for meetingthe demand for affordable, functional, andstylish clothing.

1. Phase out ukay-ukay by category
Borrowing from the African countries also
facing similar issues with second-handclothing, a phased approach may prove to
be a more effective way of implementing
the ban as it “would soften the impact of theban on the domestic consumers, as wellas the source countries” (Katende-Magezi,2017). This approach would phase out ukayukay one-by-one by category, banning firstthe badly-damaged/rag-like items while
conditionally permitting the good-as-new
ones. The goal would still be to completely
ban all kinds of SHC within a given numberof years. What this method accomplishes
is easing the stakeholders into what
would have otherwise been a drasticchange so that necessary adaptations
by all the stakeholders may be made.
There is still the risk that ukay-ukay will
simply continue to be conducted illicitly,
so it must be emphasized that the move to

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

phase out ukay-ukay should be concurrent
with the other measures recommended
in this study. Generally, the reason that
goods, such as SHC, are smuggled is thatit addresses a consumer demand (in thiscase, affordable and quality clothing) andprovides great profit to those engaged in
the underground business. To discourage
this, then, would be to meet that consumer
demand and to offer and nurture profitableventures.
Strengthening
the
local
garments industry, as earlier explained, isthe measure that would most likely quell
the underground ukay-ukay market.
2. Provide an alternative livelihood for
those involved in the industry
One of the main reasons why ukay-ukay
cannot easily be eradicated at this point
is because numerous people depend on
the industry for a living. As mentioned
in the previous recommendation, thisaction of providing alternative livelihoods
has to go hand-in-hand with the actionof strengthening the local industry,
as the latter would open employment
opportunities that can absorb those
displaced by implementing the ban on
SHCs.

5. Conclusion
Our study has made it evident
that the inconsistent implementationand faulty assumptions of RA 4653
has rendered the policy outdated andirrelevant. It is a law that has lost touchwith the Filipino people, and thus nolonger serves the public as it is supposed
to. In identifying ukay-ukay’s impact on

different aspects of Philippine society, we
recognize the challenge of addressing
the various issues of the ukay-ukay, as it
will entail an uprooting of deep-seatedeconomic practices and cultural habits
and values. Alongside these challenges,
however, is the promising potential ofukay-ukay to address Filipinos’ economic
and cultural needs without compromising
the necessity of sustainability. It is thischallenging and promising prospect ofukay-ukay that makes it deserving of oururgent attention.

FASHION REVOLUTION PHILIPPINES

Stakeholder Information
Policy Dialogue Attendees

Interviewees

Abgona, Dr. Remedios V.J.
Chief, Philippine Fiber Industry Development
Authority

Agaid, Luis Jr.
Chairman, Namarabar Indigo Natural Dye
Producers Cooperative

Abueg, Luisito
Professor, University of the Philippines Diliman

Anonymous
Bureau of Import Services, Department of Tradeand Industry

Agaid, Luis Jr.
Chairman, Namarabar Indigo Natural Dye
Producers Cooperative

Arigo, Ma. Theresa
Founder, teeforel

Branzuela, Engr. Ramon M.
OIC, Deputy Executive Director, Philippine Fiber
Industry Development Authority

Dela Cruz, Eliza Grace S.
Researcher, University of the Philippines
DilimanElumba, Celia
Director, Philippine Textile Research InstituteDela Rosa, Rogel
Trade Specialist, Trade Facilitation Division

Ferraren, Twinkle
Founder, Style Isle

Domogan, Mauricio
Mayor, Baguio City

Locsin, Ma. Rina
Professor, University of the Philippines Baguio

Elumba, Celia
Director, Philippine Textile Research InstituteManese, Annie Lee F.
Assistant General Manager, Philippine Ports
Authority

Flores, Robin
Account Officer, Coam Phil., Inc.

Subang, Irene
Professor, School of Fashion and the Arts
Design InstituteSykimte, Bianca Pearl R.
Project Manager, Industry Development
Council, Department of Trade and Industry
Vivar, Monica
Founder, DENUOFranco, Joseph Robert
Senior Trade Specialist, Trade Facilitation
Division
Gawisan, Freda
Provincial Director, Department of Trade andIndustry
Jeff
Ukay-ukay vendor from Bambang
JessieUkay-ukay vendor from Bambang

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

Locsin, Ma. Rina
Professor, University of the Philippines Baguio
Manuguid, Vhanezza
Ukay-ukay vendor from Bambang
Pille, Elma
Section Head, Donations Department,
Department of Social Work and Development
San Jose, Nela
Instructor, College of Saint Benilde
Sandico, Ditta
Designer, Ditta Sandico
Atty. Sarmiento, Willie
Bureau of Customs, Subic
SherwinUkay-ukay vendor from Bambang
Subang, Irene
Professor, School of Fashion and the Arts
Design InstituteVentura, Prince
Student/Researcher, University of thePhilippines Diliman
Villar, Deogracias
Revenue District Offices, Bureau of Internal
Revenue Subic
Vivar, Monica
Founder, DENUOFASHION REVOLUTION PHILIPPINES

Acknowledgments
We would like to thank the Policy Project team, headed by Ysabl Marie Dobles, for their
dedication and contributions to this study. The paper was written and edited by Lian Sing andMichelle Esquivias. Research was conducted by Ysabl Marie Dobles, Lian Sing, Ma. Theresa
Arigo, George Buid, and Michelle Esquivias and designed by Lian Sing. Photography wasdone by George Buid and Ysabl Marie Dobles. Special mention to Maryliz Zubiri and Kirsten
Ganzon for their insights into the structure and direction of the research. Many thanks also
to our Country Coordinator, Sophia Calugay, without whom this project would not have been
completed to fruition.
Our most heartfelt gratitude to Sarah Ditty, Sienna Somers, and Joss Whipple for theinvaluable guidance and support throughout the entire process. Thank you for shedding
light on the gaps and connections we would have missed otherwise.
Thank you to Kendall Robbins and the entire British Council for the support and funding,which gave us the opportunity to conduct a timely and painfully relevant research in ourcountry. The British Council x Fashion Revolution Policy Project initiative certainly will prove
to be instrumental in furthering the advocacy for sustainable fashion around the world.
Thank you to all the brands, organizations, agencies, and individuals for their time andinsight. The team is incredibly grateful for your participation—whether it be for interviews or
the dialogue—that proved to be vital to our research.
Finally, as always, we dedicate this paper to the thousands of people working in the fashionindustry, to the Filipino people, to the environment, and to the Fashion Revolution volunteers
around the world. Our hope is that this study helps us move closer to the sustainable future
we envision for all.

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

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THE IMPACT OF THE IMPORTATION OF SECOND-HAND CLOTHING IN THE PHILIPPINES

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