Electronics exports on track to grow 10% this year

MANILA, Philippines — The country’s electronics exports are on track to hit 10 percent growth this year, but the government needs to address issues including the ban on transport of chemicals, which is affecting the performance of the sector.

Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) president Dan Lachica said on the sidelines of the group’s 17th Philippine Semiconductor and Electronics Convention and Exhibition yesterday the country is expected to hit the 10 percent growth projection for electronic exports this year.

“Right now, we are probably hitting about four, five percent. You know how it is in the fourth quarter, the November Thanksgiving, December Christmas rush. We are not revising our projection. We’re still at 10 percent,” he said.

For the January to September period, the country’s electronics exports reached $35.34 billion, 4.71 percent higher year-on-year.

Electronics remained the country’s top export, accounting for 60.6 percent of the $58.31 billion total Philippine commodity exports for the nine-month period.

Last year, total electronics exports of the country reached an all-time high of $45.92 billion, up 12.9 percent.

The country’s electronics exports in 2021 topped pre-pandemic exports of $43.3 billion, reflecting a resurgence in the industry.

While the country’s electronics exports are on track to hit SEIPI’s growth projection, Lachica said the industry is facing some roadblocks, which include the Commission on Elections’ (Comelec) ban on firearms and controlled chemicals.

He said this has been a problem for the group as their members use chemicals as cleaning agents for electronic components and the ban means a permit would have to be approved for the transport of chemicals.

“So there is redundancy, additional cost, additional lead time,” he said.

Lachica said one company with 3,000 employees had to shut down operations for one month because the ban resulted in a delay in the arrival of some necessary chemicals for its operations.

“We’re just appealing to them (the government) to review the process and exempt the electronics industry,” he said.

He said SEIPI would also like the government to allow the work-from-home arrangement for non-manufacturing jobs in firms registered with the Philippine Economic Zone Authority without the threat of losing their incentives.

This, as some companies have been losing employees to other firms that allow work-from-home arrangements.

Other issues raised by the group are the 12 percent value-added tax on exporters’ purchases that are not directly related to the registered project or activity, and the delays from the implementation of the electronic tracking of containerized cargo and red-tagging of shipments.

Despite these issues, SEIPI believes the challenges can be addressed through close collaboration between the public and private sector.