DTI: PH electronics to grow by 8-10% in 2014

The Department of Trade and Industry expects Philippine electronics exports to grow by as much as 8-10 percent this year, as the sector continues to recover.

In a text message, Trade Secretary Gregory L. Domingo said the projection was an improvement from the 5-7 percent forecast announced by the Semiconductor and Electronics Industries in the Philippines Inc. (Seipi).

According to Domingo, the DTI’s higher projection may be attributed to the recovery of global demand for electronic goods and the new facilities being put up, which will shore up production in the country.

But Seipi maintains its modest projection of 5 percent, given the challenges the electronics and semiconductor industry will have to hurdle.

Aside from the continuing concerns the industry is now facing due to high power costs, it is also largely affected by the truck ban policy being implemented in the city of Manila, Seipi president Dan Lachica said.

While Lachica did not provide specific figures to quantify the economic impact of the truck ban on the industry, he noted that a “significant number” of Seipi members have shut down operations for several days a week.

Some companies would even shut down for as long as three days in a seven-day work week as a result of the truck ban, he added.

The truck ban policy bans eight-wheelers and vehicles with a gross weight of above 4,500 kilograms from plying Manila’s streets between 5 a.m. and 9 p.m. A temporary concession was offered by the city government, allowing trucks on the road between 10 a.m. and 5 p.m. within a six-month period.

But the ban prompted trucking firms to hike their respective hauling charges which, in turn, pushed up prices of goods by 3-5 percent.

At the same time, the truck policy had reportedly caused congestion at the Port of Manila, causing delays in the delivery of imported raw materials for the semiconductor and electronics firms.

“Almost everybody (in the industry) has some form of inbound shipping and outbound shipping, particularly for the bulky raw materials that needed to be shipped by sea,” Lachica said.

He cited as an example one company whose delays in shipments resulted in losses of about $20,000 a day.

“The 24-hour express truck lane will help. But you still have backlog and a congested port, Lachica said. He urged the local government unit to consider lifting the truck ban until the Manila Port has been decongested.

“While we’re seeing some improvement in the utilization of the Subic and Batangas ports, it’s still not enough as these two comprised only 25 percent of the capacity at the Manila Port. The obvious solution is infrastructure, which is to build roads to connect the North Luzon Expressway and South Luzon Expressway, but it’s apparently not being prioritized,” he added.