Electronics exporters turn less pessimistic

MANILA, Philippines — The Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) has turned less pessimistic as it now expects a smaller five percent decline in electronics exports this year.

For next year, SEIPI is seeing a recovery with a seven percent growth in exports.

“We have upgraded our industry projection for 2020,” SEIPI president Dan Lachica said in a Viber message following the group’s board meeting yesterday.

He said the group now sees a five percent contraction for electronics exports from an earlier projection of a 15 percent decline.

Last September, SEIPI revised its forecast to a 15 percent decline for this year from the 20 percent contraction projected earlier.

Before the coronavirus disease pandemic, SEIPI was expecting the country’s electronic exports to grow by five percent this year.

Philippine shipments of electronic products to other countries reached $43.3 billion last year.

Latest data from the Philippine Statistics Authority showed the country’s electronics exports reached $26.24 billion in the January to September period, down 11.4 percent from $29.62 billion in the same period last year.

For the month of September alone, electronics exports went up slightly to $3.63 billion from $3.60 billion a year ago.

Lachica said the country’s electronics exports have been affected by the pandemic.

He said firms have also incurred higher operating costs for logistics, as well as shuttles provided to employees to enable them to go to work.

For next year, SEIPI is more upbeat.

“Our 2021 forecast is positive seven percent, assuming favorable CREATE (Corporate Recovery and Tax Incentives for Enterprises) outcome and availability of a vaccine,” Lachica said.

When approved into law, the proposed CREATE would immediately bring down the country’s corporate income tax (CIT) rate to 25 percent from the current 30 percent, which is considered to be the highest in Southeast Asia.

In addition, the CREATE will result in changes to the incentives system.

While SEIPI supports the quick cut in CIT, the group is wary of the rationalization of tax perks as companies looking to expand may choose not to go to the Philippines if there are no competitive incentives similar to those offered by Vietnam and other Southeast Asian countries.

Lachica said SEIPI is backing the Philippine Economic Zone Authority’s position to have separate incentives for export industries and domestic enterprises, and to keep the tax perks of existing investors.