Electronic exports to remain strong

MANILA, Philippines — The electronics sector, the country’s top export, is expected to remain in expansion mode this year even with challenges in the global market that may impact near-term outlook for the Philippines and the region.

In its weekly economic preview, New York-based intelligence firm S&P Global said prospects for the global electronics industry are for continued expansion.

However, it warned of a number of headwinds that would impact the near-term outlook for the Asia Pacific region’s electronics industry.

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

Latest data showed that dollar earnings from electronic products jumped 15 percent to $3.44 billion in February this year.

Rajiv Biswas, S&P Global Market Intelligence chief economist for Asia Pacific, said lengthy production backlogs for some key electronics products, notably semiconductors, will be an important factor supporting electronics output this year.

But he noted that tighter COVID containment measures have contributed to weaker consumer demand in China and the electronics industry is still struggling with protracted supplier delivery times and pricing pressures for critical materials.

Manufacturers are also facing intense cost pressures on raw material prices and supplier fees.

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.

Biswas said the pandemic has been accelerating the pace of digital transformation due to the global shift to working remotely, which in turn boosts demand for electronic devices such as computers, printers and mobile phones.

“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.

Further, S&P Global noted that the medium-term economic outlook is still supportive for the electronics industry, with a sustained strong world economic growth forecast until 2024.

The outlook is supported by major technological developments, including 5G rollout over the next five years, as well as demand for industrial electronics.