Electronics exports seen down by 6.7-11% in 2013

Exports of electronics components this year are expected to hit $20 billion to $21 billion, down from $22.5 billion in 2012.

The projected decline, equivalent to 6.7 percent to 11 percent contraction, however, was narrower than the 10-percent to 12-percent drop projected by the Semiconductor and Electronics Industries in the Philippines Inc. (Seipi) for the year.

The decline in electronics export receipts was said to be due largely to the weakness in global demand, specifically for semiconductors.

For 2014, Seipi has maintained its modest 5-percent growth projection for electronics exports, said the group’s president Dan Lachica.

In a briefing Thursday, Lachica said the expected recovery next year could be brought about by the improving global economy which was seen to result in the rise in demand particularly for automotive and consumer electronics.

“We see recovery in the United States and Europe and that should bode well for a country that’s export-oriented,” Lachica added.

Although the Philippines is well poised for expansion and to attract new investments in the electronics and semiconductor industry, Lachica stressed the need for the government to address pressing issues, particularly high electricity rates.

“The high cost of power is crippling. We are already the highest in Asia, and we now have to bear another increase of P4.15 per kilowatt-hour. This is very painful for the industry. But we laud the Senate for looking into this issue,” Lachica said.

According to Lachica, electricity costs, depending on the nature of the business, can account for about 30 to 40 percent of the overhead costs, especially for power intensive industries.

“Although you cannot downplay the power cost, we should also consider that the Philippines has lower labor costs, high labor productivity, and available skilled English-speaking workforce. The government has also done well in curbing corruption,” Lachica said.

Other concerns that need to be addressed are infrastructure, roads, congested airports and lack of effective mass transport systems.

Seipi is also urging the government to put up the much needed facilities for research and development. Amy R. Remo