Electronics industry sees $6 to $7-B exports revenue

THE country’s electronics industry projects exports revenue for the first quarter of 2015 at USD 6.0 billion to USD 7.0 billion, Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) President Dan Lachica said.
This is after electronics exports in January 2015 increased by 15 percent to USD 2.0 billion from January 2014’s figure of USD 1.78 billion.
The projected figure for Q1 2015 is also in line with the industry’s target growth of 5.0 to 7.0 percent for the full-year 2015 or reaching some USD 27.61 billion in export revenues from last year’s receipt of USD 25.8 billion, according to Lachica.
The SEIPI president said the industry will stick to its conservative 5.0- to 7.0-percent growth target even if the sector surpassed the growth projection last year.
“We want to be realistic with our projections,” he said.
He added that the falling oil prices also benefits the industry as it should translate to lower logistics cost, power, and raw materials.
Moreover, the country’s electronics exports revenue target for this year has yet to match the revenue level during its pre-slowdown performance, a World Bank study released last January 2015 said.
“Prior to the slowdown, electronics exports reached a peak of USD 32 billion… However, five years after the slowdown, electronics exports have yet to match its pre-slowdown performance. In 2008 and 2009, electronics exports fell by 7.0 and 21 percent, respectively. Nascent recovery of the global economy led to a jump in electronics exports by 38 percent in 2010. However, this rate of growth was not sustained in succeeding years as exports contracted yet again by 23 and 0.3 percent in 2011 and 2012, respectively,” the World Bank stated.
It added that compared to the electronics exports of neighboring countries like South Korea, Taiwan, Thailand, and Vietnam which already surpassed the pre-slowdown export performance, and Malaysia which is close to recovering its losses, the Philippines electronics exports have not fully recovered since the 2009 global slowdown which led to a decline in electronics export.
Lachica, on the other hand, noted that the aforementioned Asian neighbors had aggressive public and private investments compared to the country; thus, recovering from the decline.
He added, despite the global demand has recovered, there are factors locally that temper the growth of the industry.
“Investments develop revenue,” said Lachica citing public investments, particularly in infrastructure, are needed by the industry aside from firms’ investments.
Likewise, the World Bank — in its study — identified constraints for the Philippine electronics industry to grow which include high power cost, insufficient infrastructure, and cumbersome trade regulations particularly non-tariff barriers, among others.(PNA)