The Philippine Exporters Confederation Inc. (PHILEXPORT) is optimistic Filipino firms can boost production of electronics, especially for the US market, over the medium term after a likely “flat growth” in global demand for these goods this year.
In a text message to DAILY TRIBUNE, PHILEXPORT president Sergio Ortiz-Luis Jr. shared that electronics manufacturing will be affected by “tough business environment and low demand” for usual exports.
He said such outlook echoes insights from Semiconductor and Electronics Industries in the Philippines Foundation Inc. president Dan Lachica.
However, Ortiz-Luis said SEIPI members are still looking forward to more outputs to accommodate a possible influx of orders, especially now that the factories’ main resources have become more accessible.
“Critical are investments especially in wafer plants to help boost the performance in the US and the continuing thrust to ease the flow and cost of doing business. But SEIPI is optimistic also because of the improving infrastructure and power situation,” he said.
Ortiz-Luis added the US has been expanding investments in the Philippine electronics industry through the CHIPS and Science Act, which distributes a $ 500 million fund to six other countries within five years to ensure sustainable and efficient supplies of electronics.
“It aims to improve the business environment, expand the skilled workforce and refine regulatory frameworks to establish a resilient and diverse global assembly, testing, and packaging in partner countries as parts of the supply chain,” he said.
The CHIPS and Science Act was signed by outgoing US President Joe Biden in 2022, and is expected to benefit 128,000 Filipino semiconductor engineers and technicians and over two million others working indirectly with electronics.
According to the Philippine Statistics Authority, electronics continued to be the country’s top export in October last year, accounting for 46.5 percent of all exports and posting $2.87 billion in revenues.
In the same month in 2023, sales of electronics exports were higher at $3.73 billion.
However, economists worry that returning US president-elect Donald Trump will fulfill his campaign promises signalling limited electronics and other goods production to American firms by slashing their corporate income taxes to 15 percent from 21 percent and raising tariffs on imports by at least 10 percent.