This chapter provides an overview of the conceptual and research literature utilized in the research study.

Importance of Second-Hand Clothing Sales

Ukay-ukay or second-hand clothing sales is among the most lucrative micro-businesses in the Philippines. It has grown from its humble beginnings of being a low-cost functional product that catered to the wardrobe needs of lower-income families to a stylish and beneficial clothing option. Many Baguio traders have opened up shops across Metro Manila, and these stores can be found next to mainstream malls, major business districts, and highways.

Second-hand clothing stores are gaining in popularity because of the opportunity to find excellent quality products without having to pay full price. Other reasons for the popularity of second-hand clothing include the presence of beloved labels, unique designs and styles, and the environmental advantage of recycling and reuse.

Several Filipinos have shifted to purchasing second-hand clothing at ukay-ukay stores across the country. Ukay-ukay or the second-hand clothing trend competes with department stores, shopping malls, and boutiques worldwide. Ukay-ukay shops are known to provide sale prices that are relatively more affordable.

According to Isla's research (2014), the founders of ukay-ukay or the second-hand clothing trade were once Hongkong-based Filipino domestic helpers. The clothes were usually personal items of these Overseas Filipino Workers (OFWs), primarily women, and were either purchased by OFWs themselves or from Salvation Army shops.

In 2018, President Rodrigo Duterte issued an order that second-hand clothes be transported to victims of calamities as donations through the Bureau of Customs, alongside the Department of Social Welfare and Development (DSWD) coordination (Aurelio, 2018). These second-hand clothes are imported from Hong Kong and the United States and are transported through balikbayan boxes to various stores in Baguio City and other parts of Metro Manila. The Philippine government claims that these imported items are either donations or foreign aid, while others view these as pasalubong (gifts) for family and friends in the country. Ukay-ukay's popularity is due to its affordability and fashionability.

In 1966, the Philippines passed RA 4653, which deemed commercially importing used textiles as illegal. The Act was initially passed to safeguard the health of the Filipino population from potential health hazards that used clothes may contain, as well as to uphold the country's dignity by refusing to accept discarded clothing from other nations, as stated by the Fashion Revolution Philippines (2019).

Despite RA 4653, buyers of second-hand clothes in the Philippines continue to patronize them. Ukay-ukay is a budget-friendly clothing source for many, particularly those from low-income families. It has gained popularity due to its distinctiveness, sustainability, and thrill among fashion designers and consumers from higher-income groups. While ukay-ukay buyers are aware of its potential negative effects, they still purchase these products due to their low price and other positive qualities. Ukay-ukay satisfies the consumer's clothing needs.

For instance, banning the importation of ukay-ukay due to health concerns may be inappropriate if the clothes being imported are overruns or unused, good-as-new second-hand items. Conversely, while it may be ideal not to import rag-like clothing for sale as ukay-ukay, its importation could be considered for other purposes, such as raw materials (as cited in Fashion Philippines Revolution, 2019).

In 2017, the Observatory of Economic Complexity (2017) revealed that the recorded annual value of imported SHC in the Philippines was $43.3 million, which is roughly P 2.15 million. According to Macairan (2017), the Bureau of Customs seized P500 million worth of ukay-ukay in Pasay City in March 2017.

According to the Bureau of Customs (BOC) website, 288 bales of used clothes commonly known as "ukay-ukay" were apprehended at the Port of Cebu on September 7, 2021. The seized items from Korea are estimated to have a street value of Php2.3 million and were intercepted by the Customs Intelligence and Investigation Service (CIIS) due to credible intel. The Pre-Lodgement Control Order (PLCO) was issued by Acting District Collector Charlito Martin R. Mendoza as a preventive measure against illicit articles entering the country. A 100% actual assessment was immediately conducted upon the issuance of the PLCO, which involved the participation of representatives from the CIIS, Enforcement and Security Service, Philippine Coast Guard, Philippine Drug Enforcement Agency, and Chamber of Customs Brokers, Inc.- Cebu Chapter. After confirming the shipment's contents, which contained "ukay-ukay," a Warrant of Seizure and Detention was issued by District Collector Mendoza under Section 1113 (F) of the Customs Modernization and Tariff Act and Republic Act No. 4653. In July, a similar incident happened when the port confiscated a shipment of "ukay-ukay" worth Php4.5 million from Thailand. Any forfeited items found violating customs rules and regulations will be disposed of following proper procedures.

In an article by Aurelio J. M. for INQUIRER.net (2018), the second-hand fashion trade and consumption in the Philippines have expanded existing discourses. Used clothing trade is still thriving in the country despite government regulations and customs restrictions to combat illegal importation of such items. Fashion Revolution Philippines (2019) revealed that imported "ukay-ukay" has contributed to a decline in local textile and clothing industries. The Observatory of Economic Complexity (2017) stated that used clothes rank among the leading items exported by developed countries to developing nations, including the Philippines, where they continue to stimulate the growth of used clothing trade.