Electronics roadmap flags targets, hurdles

The electronics sector can double potential investment inflows and export performance to $10 billion and $112 billion, respectively, by 2030 once the sector receives government support and increases output for higher-value products and services, according to the Semiconductor and Electronics Industries in the Philippines Inc. (Seipi).

But the industry group’s roadmap, showed that, without government support or value-adding by the players, investments would reach only $5 billion, while exports would hit only $52 billion during the period.

Those are the long-term scenarios under the electronics industry roadmap presented at the Board of Investments last week.

Assuming that the industry does not get government support over the medium-term, or until 2022, investments in the sector may only reach $3 billion, with $37 billion worth of exports to be generated.

In the short-term or until 2016, the conservative target is to generate $2.5 billion in investments and $28 billion worth of exports.

Seipi stakeholders said government support, be it in the form of incentives or facilities such as the Department of Science and Technology-funded national electronics testing center, would speed up growth in investment inflows and export sales.

However, stakeholders expect it will be a tough road for the industry, which boomed in the early 2000s and dwindled around 2009.

High electricity, labor and logistics costs are just some of the many challenges for local electronics manufacturers, according to the industry roadmap.

Soft infrastructure, including research and development centers, is also lacking, making it harder for manufacturers to form ecosystems of suppliers and assemblers.

The newly minted electronics roadmap stressed the need to  “gradually” move toward more value-added activities such as testing, repair and warranty.

The electronics industry remains the largest contributor to Philippines exports with a 43-percent share, or $22.6 billion, of the total in 2012, based on data from the National Statistics Office.