SEIPI wants gov’t support in increasing local content

MANILA, Philippines - The electronics and semiconductor industry is seeking more government support as the country’s top exporter moves to slash significantly its import dependence.

Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) president Dan Lachica said while the industry is the largest exporter in the country at $28.8 billion in 2016, it is also a major importer with $22 billion worth of inbound shipments made last year.

This puts the industry’s value added at a low level of only 25 to 30 percent, according to the SEIPI head.

“Think about this, of that $22 billion, if we could localize just half of them, then that’s about $10 billion to $11 billion which would be a boost to the economy,” Lachica said.

“We will continue to need the support of the government,” he added.

Lachica said while 100 percent localization of the supply chain would be hard to achieve over the short term, a five to 10 percent gradual increase in its value-added would be a step in the right direction should the Philippine electronics industry want to become more than just a test and assembly point for electronics products.

Lachica said SEIPI is working with various government agencies such as the Department of Trade and Industry and the Department of Science and Technology to develop small and medium enterprises in Mindanao that can be part of the local supply chain.

SEIPI continues to see growth prospects for the industry this year, expecting a five to six percent growth “fueled by the digital economy’s need for electronics products.”

In 2016, total outbound shipments of electronics finished flat after recording $28.9 billion the previous year.

Lachica earlier said among the most pressing concerns for the industry is the planned removal of the zero value added tax exemption on local suppliers or indirect exporters.

“We’re going to be affected drastically. What will happen is it will be cheaper for companies to import. The problem with that is you’re going to kill the local suppliers. Here we are trying to promote small and medium enterprises and developing the local supply chain. So it’s going to be a damper,” he said.