PH electronics sector seen growing faster than expected at 7-11% in 2014
MANILA, Philippines–Despite lingering congestion at the ports of Manila, the Philippine electronics industry is seen to grow faster than expected this year at about 7 to 11 percent due to rising global demand and the recovery of key markets.
This growth may, however, slow down to about 5 to 7 percent next year, the Semiconductor and Electronics Industries in the Philippines Inc. (Seipi) reported Thursday.
“We are revving up our projection from the 5-8 percent. We’ve come up with a revision (of our forecast) in the last quarter given the information and feedback from our members. We are upgrading (our growth forecast) to 7 to 11 percent for 2014. For 2015, we are looking at a 5 to 7 percent growth. These projections are within the range announced by the Department of Trade and Industry,” Seipi president Dan Lachica said in a briefing on Thursday. “If we didn’t have port congestion, growth will be slightly higher than that.”
Last year, export revenues from the semiconductor and electronics industry reached $21.82 billion, reflecting a 5-percent contraction compared to export receipts in 2012.
According to Seipi chair Arthur Tan, the growth in electronics exports this year will be fueled by rising consumption requirements in the United States and Europe, while the expected increase in exports receipts from the sector next year will be driven by the strong demand in the global automotive and mobile phone markets.
In the Philippines alone, for instance, vehicle sales are expected to surge to over 300,000 units next year, which meant that the electronics components for these units will see an increased demand.
The softening of global oil prices is also expected to have a positive impact on the electronics and semiconductor sector as this will help lower the cost of energy, logistics and transportation.
However, continuing port congestion may dampen prospects as some Seipi members continue to face losses of about $20,000 to as much as $1 million for each day of work stoppage due to the lack of raw materials.
No company has completely shut down operations here, but some have started to shift their production volumes elsewhere in the region, Lachica said.
“The port congestion will have an impact, more on an immediate basis. Ports are used for certain types of materials like chemicals, and bulk equipment. We’re not the only factory to produce the product, and if it will take us six months to come up with equipment as against the two months it will take to produce it in another country, then… (that may translate) to revenue losses for us. Most of our members have already voiced their concerns that (the parent firms) are watching very closely how they will strategize expansion in the Philippines given limitations in the infrastructure and ports,” Tan explained.
The semiconductor and electronics sector is a critical growth driver of the local economy, being the country’s top export product.
