Slower growth seen for electronics sector

MANILA, Philippines - Philippine electronics exports are seen growing at a slower pace this year given lower demand from the country’s major trading partners coupled with a flurry of concerns.

In a briefing yesterday, Semiconductor and Electronics Industries in the Philippines (SEIPI) president Dan Lachica said the country’s electronics group is projecting an electronics exports growth of between two percent and five percent this year.

“The global economies, our main export destinations such as China and Japan have not fully recovered. The US also is going to be interesting given its upcoming elections, while Europe has this big migration issue so there’s a lot of uncertainties in the global economy,” Lachica said.

“While we recognize that there’s going to be a big requirement for cyber security and Internet of things, remember that demand already escalated for 2015 that is why (electronic exports) rose eight percent. We may not see the same kind of demand for 2016 that’s why we have given a range of two to five percent,” he added.

Aside from external factors, Lachica said local challenges besetting the industry are expected to affect exports growth this year.

The SEIPI official said one of the most pressing issues is the control on common industrial chemicals which the Philippine National Police identified as ingredients that could be used in the manufacture of explosives.

On top of that, he said the Commission on Elections imposed an additional layer of regulation within the six-month gun ban period in line with the coming national elections.

“The long processing time to secure the license and permits has caused delays and loss of revenue for a number of companies,” Lachica said.  

The group also cited the high cost of power in the country as another pressing concern for the electronics industry.

“Furthermore, the Energy Regulatory Commission‘s draft revised rules for contestability and rules on the mandatory migrations to Comprehensive Retail Electricity Market are expected to bring major changes in the competitive retail market,” SEIPI said.

Last year, total shipment of electronics rose 7.9 percent to $28.92 billion from $26.79 billion in 2014.

The electronics industry accounted for 49 percent of the total Philippine exports, directly employed 2.8 million, and had a total of P80.78 billion investments for the country.