Talent shortage, geopolitics weighing on PH semiconductor sector
MANILA, Philippines — Skills shortage, geopolitics, as well as a number of domestic issues, are preventing the Philippines’ semiconductor industry from moving up the global value chain, United Kingdom-based think tank Oxford Economics said in its latest report.
The report released on Monday pointed first to the shortage of talent as one of the four biggest speed bumps slowing down the expansion of the $40-billion sector.
“We believe that developing human capital should be a joint effort between government and the private sector. The involvement of the private sector can help governments to better understand the skills required in the workplace,” the report said.
Citing the World Bank’s Human Capital index, the Oxford report said the Philippines’ score was 0.52 in 2020, which is lower than those of most of its neighboring countries.
READ: PH urged to double output of chip sector
Another important factor raised by the report is the Philippines’ strategy in dealing with China, one of the biggest export markets, amid tensions in the West Philippine Sea.
“President Marcos has clearly aligned with the United States, in effect reversing his predecessor Duterte’s pro-China stance,” the report said.
Market access
“This swing has had a significant impact on the country’s development strategy and market access,” it added.
The report also noted the ease of doing business in the Philippines, pointing out that it has lagged behind its peers in the Association of Southeast Asian Nations in luring investments because of this matter.
“Regulatory inconsistencies, a burdensome bureaucracy, and corruption are the main disincentives to investment,” Oxford’s report said.
The fourth main hindrance highlighted by the report is intellectual property protection, explaining that the country has inadequate laws.
READ: US microchip maker sets $1-B expansion of 2 PH plants
“Weak enforcement, lack of transparency, and limited legal remedies impose significant challenges in protecting IP,” the report said.
According to preliminary data from the Philippine Statistics Authority, the country’s electronic exports dwindled by 9.2 percent in 2023, settling down to $41.9 billion from $46.15 billion in 2022.
The Semiconductors and Electronics Industries in the Philippines Foundation Inc. predicts almost no growth in 2024, owing to a number of factors including the geopolitical and trade conflict between the United States and China. INQ
