MANILA, Philippines - President Aquino wants the government to ease the effects of the strong peso on exporters and overseas Filipino workers (OFWs).
Speaking before the Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI), Mr. Aquino said government economic managers are looking for ways to cushion the impact of the rising peso on local industry.
“We are aware of the effect of the appreciation of the peso not just to the electronics industry but to the export industry as a whole,” he said.
“We also appeal to our neighboring countries to help mitigate its effects and will continue to do so in the Asia-Pacific Economic Cooperation senior officials’ meeting in Japan.”
Mr. Aquino said the government would take advantage of a strong peso amid the global concerns on the weakness of the dollar.
“This could be a good time to purchase capital goods to address the balance between the peso and the dollar,” he said.
Mr. Aquino said the country could try to remove its excess volumes of dollars.
“Maybe this is now the time for us to purchase capital goods that could be used, for instance, for infrastructure programs,” he said.
Mr. Aquino said he had spoken with National Economic and Development Authority Director General Cayetano Paderanga and Finance Secretary Cesar Purisima about the opportunities that would arise from having a strong peso.
“It would be better for the finance department to work on the details because a miscue in terms of policy pronouncement or slight misreading of the jargon will result in negative effects in the market,” he added.
Despite the strong peso, SEIPI is expecting to double its exports in six years through the Public-Private Partnership program.
Dan Lachica, SEIPI chairman, told Mr. Aquino in a forum at Malacañang that the industry aims to double electronics exports from $22 billion in 2009 to $50 billion in 2016.
SEIPI is the leading and largest organization of foreign and Filipino electronics companies in the Philippines.
Lachica and SEIPI president Ernie Santiago said several large multinationals were revisiting their long-term strategies and were making decisions now.
“There is a growing sentiment to reassess the geographical footprint and Asia is definitely in play,” they said.
“The China plus-plus strategy is still in play. China is re-doing its policies. However, it is also clear that China is not the only player. Vietnam is very popular. Malaysia continues to have the right infrastructure in place. Indonesia is gearing up.
“The Philippines is in a very good situation to be part of the action. The timing is now.”
Lachica said given this business condition, the industry was bullish to sustain, if not further increase, the growth of the semiconductor and electronics industry in the Philippines.
A growing optimism is driving the general industry feeling that the new government was morally upright and full of promise, he added.
Lachica said to achieve the target of doubling exports by 2016, the industry would partner with the government in increasing investments, improve technology capabilities, develop ways to lower the cost of doing business, particularly power cost, and create an enabling environment that would be conducive for business growth.
“A target of $2 billion in investments every year for the next six years is aimed to be achieved through an active promotion of the Philippines as a smart choice for the electronics business and the installed capabilities and capacities of Filipino workers,” he said.
Lachica said they would need a planned technology roadmap focusing on leveling up competencies as a production center for packaging, assembly, test, mass data storage, automotive electronics and other semiconductor and electronics manufacturing services and making the Philippines as a solar or photovoltaic manufacturing hub in Southeast Asia.
“They are also asking for lower cost of power and a conducive business environment such as infrastructure development, peace and order, non-disruptive labor, and policies such as fiscal incentives, and other enabling government rules and regulations that would sustain what had been given to the industry before,” he added.
Santiago said for 2010, SEIPI was projecting a 30 percent growth worth $28 billion in exports.
For the first 10 months of the year, investments have already totaled $764 million while direct employment had reached 505,000 workers, he added.