PH exports down in 2013, up in 2014 — group

MANILA, Philippines – The Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI) is already expecting merchandise exports to decline by 10% to 12% this 2013, instead of its initial forecast of a 5% increase.

It cited as key reason the continuing weakness in global demand for semiconductors, which account for 76% of the sector’s total shipments.

The industry group, however, expressed confidence on the exports sector’s recovery in 2014.

On the back of a continuing strength in the automotive and consumer electronics market as well as the infusion of new investments, SEIPI officials said it is banking on a 5% growth in 2014. 

READ: Electronics exporters slash 2012 growth target to zero

Electronics exports in January-to-August were down 13% to $13.63 billion from $15.71 billion a year ago, dragged down by semiconductors, which dropped 11.62% to $10.44 billion.

In a press briefing on the sidelines of SEIPI’s CEO Forum and 114th general membership meeting at Solaire resort Hotel on Monday, October 21, SEIPI president Dan Lachica stressed that the Philippines has a lot of exposure in the manufacture of automotive and consumer electronics, such as smart phones and other gadgets like desktop computers and laptops which continue to enjoy huge demand abroad.

Alternative manufacturing site

Lachica said that an opportunity could come from companies with operations in Thailand, now experiencing another wave of flooding after 2011, to relocate operations in the Philippines.

Foreign firms based in China also find operations in that country increasingly becoming more expensive and choose alternative locations like the Philippines.

SEIPI board director Sunil Banwari of ON Semi said his company would be investing additional $8 million for high-end automotive electronics testing in its plant in Cavite.

Lachica said most of the investments earlier anticipated have come in but in modest amounts. Investments as of the first half stood at $256 million.

Lachica said one major investment is still in the works, one which would require a 30-hectare facility 3 three major printer companies — Canon, Brother and Murata — which have set up factories here are bringing in 20 to 30 suppliers.

Lachica said SEIPI is also encouraging investors from Korea to explore investments in the Philippines and make it a part of their supply chain.

Exports of automotive products, although small in value, have increased more than three-folds to $362.75 million versus $85.45 million a year ago.

SEIPI noted that demand for storage devices and equipment have been slow while that from the industrial sector had been hit by price erosion due to stiff competition. Multinationals are also not investing in equipment for their IT needs.

Lachica said demand for semiconductors is picking up. Mid-single digit growth is expected toward the latter part of 2013 driven by memory chips.

Capacity utilization of semiconductor operations, which are now at 80%, would increase in 2014 as semiconductor manufacturers await inventory replenishment before end-2013.

“The industry is looking to other areas within the electronics industry to be able to meet its objectives to becoming a $112-billion export industry by 2030. – Rappler.com