SEMICONDUCTOR exporters are confident they can hit their target growth of 6 percent this year in spite of the global uncertainty on the future of trade largely due to Washington’s protectionist measures.
The Semiconductor and Electronics Industries in the Philippines Foundation Inc. is standing behind its growth projection of 6 percent for the year. Seipi President Danilo C. Lachica said he is optimistic the country’s top exporting sector can withstand the escalation of a trade war between large economies.
Seipi is looking to grow the electronics industry by 6 percent this year, following an all-time high exports receipt of $32.7 billion last year. It was also an 11- percent increase from the $29.4 billion recorded in 2016, and contributed 52 percent of the country’s total merchandise exports at $62.87 billion in the previous year.
“There is nothing to be alarmed of because compared to April last year, [our April performance this year] is still 5 percent higher. Most important, [our] year-to-date at $11.75 billion [is] still 3.3 percent higher than last year,” Lachica said.
“We are maintaining our 5 percent to 6 percent growth projection, and that should bring us to about $34.5 billion to $36 billion, notwithstanding all the infractions you hear whether it is [the] China-United States trade war or [the] TRAIN [Tax Reform for Acceleration and Inclusion]. These are challenges, but I think the fact that we are operating in a technology-driven global market, they all use electronic components,” he added.
Lachica admitted it is becoming difficult to expand the industry at a time the future of global trade is uncertain, but nonetheless stressed that the sector is in a “very comfortable” position to grow this year.
Achieving their target for the year will be crucial for electronics exporters, as they are looking to reach $50 billion in export receipts by 2030. Apart from this, they are also banked on to lead the exports sector in the government’s objective to hit $122 billion in export receipts—the lower end of a target that goes as high as $131 billion—by 2022.
In February the Seipi chief said exporters opted to weather their expectations given the ever-changing nature of global demand. He added it is better they level down their projection and not get too excited after their one-for-the-books performance.
Last year Hong Kong retained its position as the country’s top importer of electronics with a share of 21.56 percent, higher than the 19.47 percent in 2016. On the other hand, the US took over China as the second-largest recipient of Philippine-made electronic products at 12.66 percent and 12.61 percent, respectively.
Rounding up the top importers of electronics are Singapore and Japan at 9.97 percent and 8.94 percent, respectively. Germany, Taiwan, the Netherlands, Thailand and South Korea were also among the highest importers of electronic goods from the Philippines.
The electronics industry saw its growth projection this year threatened with the US’s decision to impose stiffer tariffs on steel and aluminum.
In a March interview with the BusinessMirror, Lachica said “there could be impact” on their sector, as China—the previous target of US duties—“is one of the big export destinations and import origins” of electronic products. However, until the impact is felt, he argued there is no need yet to recalibrate their growth target for the year.
Image credits: Nonie Reyes