Demand for electronics seen to pick up

Prospects for the electronics sector remain bleak for 2011 even with the seasonal strengthening of demand for consumer products in the second half of the year, experts said.

Semiconductor and Electronics Industries in the Philippines (Seipi) president Ernesto B. Santiago said sales of electronics were expected to improve in the second half of 2011 compared with the first half.

Economic Planning Secretary Cayetano W. Paderanga Jr. was also optimistic on second-half sales of electronics.

“Historically, it is during the third quarter of the year that the demand for electronics would pick up in preparation for the holiday season,” he said.

Paderanga could not predict, though, that there would be enough demand to match last year’s growth.

Cid L. Terosa of the University of Asia and the Pacific said the increase in imports in June 2011 was partly due to the increase in demand for inputs that would be used to produce consumer goods for export and the local market for the rest of the year.

Factory output will likely rise, Terosa said, because of the traditionally brisk consumer spending in the fourth quarter of the year.

“I am not sure, however, if imports of electronic products will recover since the world market for electronics remains sluggish and the Japanese economy is still recovering from multiple crisis events,” Terosa said.

Year-end demand in 2011 may not even be enough to match that of the second half of 2010, Santiago said.

“The second half of 2010 was strong. The whole year guidance is negative 5 percent at the moment. This is even with Japan supply recovery,” Santiago said in a text message.

The market is volatile especially due to the United States debt issue, the financial crisis in Europe and the political turmoil in Libya.

“These will lessen consumer spending on technology products,” Santiago said.

Former Budget Secretary Benjamin E. Diokno, now a professor at the University of the Philippines School of Economics, is not optimistic either.

Import growth started its downward trend after peaking at 35.6 percent in November of 2010, with electronics as one of the major losers, Diokno noted.