THE Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi) expressed optimism that the sector’s export performance will catch up with the 4-percent decline in electronics exports in the third quarter of this year.
“As you know, we were clobbered in the first quarter and we contracted 15 percent. Recovered in Quarter 2, the deficit was reduced to about 7 percent and Q3, 4 percent,” Seipi President Danilo C. Lachica told reporters on the sidelines of the signing of a Memorandum of Understanding (MOU) among the Department of Trade and Industry (DTI), Makati Business Club (MBC) and Unilab on Tuesday in Makati City.
For the fourth quarter of the year, Lachica said the industry is hoping to catch up with the 4-percent deficit recorded in the third quarter. In particular, he said Seipi is banking on semiconductors and components, which is 70 percent of their exports, automotive electronics and commercial electronics.
In an e-mail sent to reporters, the Seipi chief unveiled that from January to September 2023, Philippine electronics exports amounted to $33.75 billion, 4.37 percent down from the $35.30 billion electronics export earnings recorded in the 9-month period in 2022.
Despite the 4-percent deficit in electronics exports recorded in the 9-month timeframe this year, Lachica said, “The good news is we’re looking at a very positive Q4.”
“So if you recall, we had a 5-percent projection for 2023. We said magiging [that will just be flat]. It’s still doable and you know, flat isn’t necessarily bad given the conditions in the new global economy, geopolitical war, trade war, recession,” Lachica pointed out.
In August 2023, the Lachica told reporters that Seipi revised its growth target for electronics exports from 5 percent to zero percent for 2023 due to ongoing geopolitical conflicts such as the trade war between the United States and China.
Lachica explained that the current geopolitical conflicts impact the supply chain, noting that these have worsened the existing domestic issues hounding local exporters in the country such as the rising cost of logistics.
“For example, [with] Russia of course we know about the fuel price increase…As it is, our logistics and power cost are already high, and now they have been exacerbated…for example in Ukraine, they supply the world’s [requirements] of neon or palladium [which are used in] power devices,” he said. Based on the data the Seipi chief provided, the $33.75-billion electronics exports earnings recorded from January to September 2023 represents a 61.89-percent share in the country’s total exports pie.
In 2022, Seipi clocked in $49.09 billion worth of export earnings, a 6.88-percent annual growth from the US$45.93 billion recorded in 2021.
Image credits: Nonie Reyes