By Justine Irish D. Tabile, A reporter
PHILIPPINE EXPORT OF semiconductors and electronics production is likely to be flat in 2025 amid declining demand, i Semiconductors and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said.
SEIPI President Danilo C. Lachica said the board confirmed its previous forecast of a 10% decline in semiconductor and electronics exports this year.
“We just finished our board meeting last week. The forecast of a 10% decline in 2024 is the same, while exports in 2025 are flat,” he said in a Viber message on Monday.
Mr. Lachica said exports will likely end by 2025 as the semiconductor and electronics industries are hit by “tough business. environment and low demand.”
Exports of electronic products accounted for 55% of the Philippines’ total exports of $55.67 billion The period is January to September.
In the first nine months, the Philippines exported electronic products worth $30.6 billion, down 2.2% from $31.28 billion last year amid soft demand.
Noteworthy, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said the expected protectionist policies of US President-elect Donald J. Trump and trade wars could affect Philippine exports, including electronic products.
“Trump’s protectionist policies could lead to higher costs, and trade wars could reduce global trade and global economic or business activity,” Mr. Ricafort said in a Viber message.
In a November 25 report, GlobalSource country analysts Diwa C. Guinigundo and Wilhelmina C. Mañalac said that Mr. Trump’s 60% tariffs on Chinese goods and up to 20% tariffs on foreign goods could hurt Philippine exports to the US.
“The US is the Philippines’ largest export destination, accounting for an average of 16% of total foreign trade over the past five years,” analysts said.
“Although the share-to-total has declined slightly due to the various trade policies of the Philippine government in recent years, further decline in exports to the US does not bode well for the country,” they added.
Earlier, Mr Lachica said the country would need more investment to improve the mix of exports and make it more competitive in the world.
“One thing I heard when we were in the US is that the Philippines fell asleep in the semiconductor and electronics industry, referring to the previous administration,” he said in a panel discussion during the National Exporters Week in December. .
“In fact, we have large flights from the electronics industry for motivational reasons,” he added.
Mr. Lachica said the “good news” is that the Marcos administration is addressing the issues regarding the adjustment of incentives through the use of Corporate Recovery and Business Tax Incentives to Increase Opportunities for Economic Recovery (CREATE MORE).
Mr. Marcos last month signed Republic Act No. 12066 or the CREATE MORE Act, which aims to improve the country’s fiscal welfare policies.
The CREATE MORE Act extended the duration of tax credits to 27 years from 17 years, and reduced corporate income tax for registered businesses.
Mr. Lachica said he sees the government’s efforts to reduce the cost of electricity and goods using the Luzon Economic Corridor.
The Luzon Economic Corridor was created through a tripartite agreement between the Philippines, the US and Japan. It is part of a wider partnership supported by the G7 Partnership for Global Infrastructure and Investment.
“So, we are very optimistic, at least from an industry perspective, to announce that the Philippines is back,” he said. “Yes, there are other problems that we have to face. But the convenience of doing business has improved, the infrastructure is improving, and the power is improving, so I think it’s a call to action. [for our partners] to rethink the Philippines.”
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