PH urged to double output of chip sector

MANILA, Philippines — US Commerce Secretary Gina Raimondo on Tuesday urged the Philippines to double the number of its chip manufacturing facilities, vowing support from Washington in expanding the country’s multibillion export sector.

Raimondo, who was in the country for a two-day trade mission which began on Monday, said that chip supply was too concentrated in a few countries today—an issue which can be remedied in her view by increasing the production capacity of smaller producers such as the Philippines.

“[The] Philippines already has 13 semiconductor assembly, testing and packaging facilities. Let’s double it. It is the moment now of growth. Your country has the talent, you have the expertise,” she said during a business forum in Makati.

The American official also referenced the support that will come from the US Chips and Science Act, a recently passed legislation, which allocates some $52.7 billion for funding semiconductor research, development, manufacturing and workforce development.

READ: Biden signs bill to boost U.S. chips, compete with China

According to the Department of Trade and Industry (DTI), the United States has chosen the Philippines as one of the partner-countries under this industry development measure.

Funding support

In another interview with reporters on the same day, Philippine Trade Undersecretary Ceferino Rodolfo said the Philippines needs funding support, expertise and assistance in linking universities with industries.

“But more than the funds, it’s the access to the technical expertise that is important,” Rodolfo said, citing the government’s priority.

The Philippines’ electronics exports accounts for the largest share of commodities shipped out, with the total annual earnings from this commodity group standing at $41.9 billion in 2023.

Shrimp ban

Meanwhile, the Philippines has secured Raimondo’s support in efforts aimed at getting the US ban on local shrimp paste products and garments lifted, marking a significant backing in Washington on current issues affecting the export industry.

READ: Lifting of US ban on shrimp exports sought

“While these are not directly within the purview of the [US] Department of Commerce, we are deeply thankful for the personal commitment of Secretary Raimondo to closely collaborate with us in finding a clear way-forward to address the issues,” Rodolfo told reporters on the second day of the trade mission.

Rodolfo said this commitment from the US official demonstrates a “whole of United States approach in deepening our strategic partnership and alliance across all fronts.”

Starting around mid-February, close to a billion pesos worth of shrimp exports coming from the Philippines that are being shipped to western countries were put on hold due to concerns over commercial fishing technology that adversely affects turtles.

Data from the DTI’s export marketing bureau showed that the Philippines exported 3.21 million kilograms of shrimp and prawns, both fresh and processed, to the United States in 2023.

The value of these export goods to the western country is valued at $16.01 million or P895.76 million (at $1 = P55.95), according to the same government agency.

Garments issue

Meanwhile, Pascual said the issue on garment stemmed from a US law banning the entry of apparel exports using cotton from a province in China, referencing the region in the East Asian country where the Uyghur population is being persecuted.

READ: PH garment exporters brace for sluggish global market this 2024

The Philippine trade chief had said that the cotton being used by local producers are not from China but from Brazil, Turkey and the US itself.

Sought for comment on the garments issue, the Foreign Buyers Association of the Philippines (FOBAP) – which exports about $1 billion worth of garments and apparels annually – said they had recorded isolated cases of the problem as far back as two years ago.

“USA applies isotopic tests on items for testing. FOBAP Philippines has been using cotton sheeting made from India, Pakistan, Egypt and others,” FOBAP president Robert M. Young told the Inquirer.