Electronics exports seen to grow despite US tariff

MANILA, Philippines — Philippine electronics exports are expected to post a flat to modest growth this year, despite risks from the plan of the United States to impose tariffs on its semiconductor imports, according to the Semiconductor and Electronics Industries in the Philippines Foundation Inc.

SEIPI president Dan Lachica told reporters that the group still expects a flat to modest growth in electronics exports this year.

“I wouldn’t be surprised if we see some modest growth,” he said, noting that an uptick of one to two percent is possible.

Last year, Philippine exports of electronic products reached around $42.7 billion.

Lachica said his optimism is based on the country’s latest exports performance.

Data from the Philippine Statistics Authority showed that exports of electronics went up by 7.2 percent to $25.61 billion in the January to July period from the $23.88 billion in the same period a year ago.

“What I’m seeing as of July… if you linearize that to the end of the year, it’s going to be more than $42.6 billion,” Lachica said.

Given the geopolitical uncertainties and US President Donald Trump’s policies, he said it would be prudent, however, to project flat to modest growth for this year.

“Notwithstanding the tariff, I still see no contraction,” he said.

Earlier, Trump said he would impose tariffs on semiconductor imports from companies that do not invest in production in the US.

Special Assistant to the President for Investment and Economic Affairs Frederick Go earlier said the government would be seeking an exemption from the tariff on semiconductors.

At present, semiconductor exports are not subject to any tariffs because of Section 232 of the US Trade Expansion Act of 1962.

Semiconductor exports are also not covered by the 19-percent reciprocal tariff imposed by the US on Philippine goods.

While Lachica does not expect the US tariff on semiconductors to be imposed this year, he said companies in the Philippines continue to produce chips based on demand.

Should the US push through with its plan to slap tariffs on its semiconductor imports, he said the impact is not expected to kick in immediately and could be felt in three to six months.

“So you have time to make adjustments,” Lachica said.

According to Lachica, new technologies including artificial intelligence would drive the growth in electronic exports.

“Any technology-driven device you use uses chips,” he said.

HSBC Asia Economics associate director Ines Lam said electronic exports from Southeast Asia have shown resilience because of the exemption from tariffs.

“Electronics demand has been holding up really well. Exports, so far, are doing OK. But I am afraid we may not be able to say the same in the next few months when tariff effects really kick in,” Lam said.