Demand for electronics exports to remain strong this year

MANILA, Philippines — The electronics sector in the Asia Pacific region is expected to have a strong global demand this year, with the Philippines already seeing some improvements.

In its weekly economic report, market intelligence firm IHS Markit said global demand for electronic products would bounce back strong this year following a challenging 2020.

This as global economic recovery will improve throughout the year with the rollout of COVID-19 vaccines.

“In the first quarter of 2021, global electronics demand has rebounded significantly from the lows of the first half of 2020 when lockdowns disrupted production and consumer spending,” IHS Markit AsPac chief economist Rajiv Biswas said.

Last year, Asian electronic production suffered severe supply disruptions and slumping global demand due to the pandemic and lockdowns.

The electronics manufacturing industry is an important part of the manufacturing export sector for many Asian economies, including South Korea, mainland China, Japan, Malaysia, Singapore, Philippines, Taiwan, Thailand and Vietnam.

Electronics is the Philippines’ top export, accounting for almost 60 percent of the total.

Latest data showed that electronic products registered a marginal increase of 0.3 percent in January to $3.24 billion.

Specifically, electronic products on electronic data processing, consumer electronics, control and instrumentation, and medical and industrial products saw significant increases.

“The impact of the pandemic has accelerated the pace of digital transformation due to the global shift to working remotely, which has boosted demand for electronic devices such as computers, printers and mobile phones,” Biswas said.

The easing of lockdowns in many countries has also triggered a rebound in consumer spending, helping to boost demand for a wide range of consumer electronics,” he said.

IHS Markit noted that the medium-term economic outlook is also supportive of the electronics industry, with a sustained strong world economic growth forecast from 2022 to 2024.

Biswas said the outlook for electronics demand is also supported by major technological developments, including the rollout of 5G over the next five years, which would drive demand for 5G mobile phones.

Telco giants Smart and Globe are already ramping up their 5G coverage in the country.

“Demand for industrial electronics is also expected to grow rapidly over the medium term, helped by Industry 4.0, as industrial automation and the Internet of Things boost rapidly growth in demand for industrial electronics,” he said.