Vietnam seen as PH’s electronics exports rival

MANILA, Philippines – Electronics exporters in the Philippines are looking at Vietnam as a formidable competitor in shipping semiconductors due to its lower incidence of port congestion and power cost.

“Vietnam has roughly half of the Philippines’ power cost and there’s no port congestion, which could impact the decision of investors,” Dan Lachica, president of the Semiconductors and Electronics Industries in the Philippines Inc. (SEIPI) said Thursday, December 18.

Shipping solutions provider CargoSmart said the country’s capital ports had the highest average vessel delays during the peak period of September-November compared to Ho Chi Minh, Vietnam and Nhava Sheva, India.

In its survey, Manila had an average delay of 128.8 hours between September 15 and October 14, while Ho Chi Minh only had an average delay of 16.7 hours.

Nhava Sheva in India posted the lowest at 16.4 hours.

The delays were worse in October 15 to November 15, when Manila had an average delay of 145.6 hours, while Ho Chi Minh only had 20.2 hours and Nhava Sheva, 15.6 hours.

Apart from favorable port condition, Vietnam’s industries also enjoy lower power cost. Unlike in the Philippines, Vietnam’s power sector is largely controlled by the government.

“From operations perspective, these are telling factors of choosing a site,” said Lachica.

Losing the country’s electronics sector to competitors is not something local exporters are worried about though.

Despite port congestion and high power rates in the Philippines, Lachica said the industry will manage to get through the bottlenecks.

With an increasing global demand for electronic products such as mobile phones and automobile, the industry is seen to grow between 6%-8% in 2015, said Lachica.

For instance, Ayala-led Integrated Microelectronics (IMI) is looking at the money supply of the world’s various major economies.

“There’s enough money supply in US, Europe, and Japan that’s providing liquidity in the market. China is (also) printing more money,” IMI president and CEO Arthur Tan said.

Merchandise exports – semiconductors and electronic data processing – grew by 15.7% in September, beating China’s 15.3%.

In 2015, revenues from exports are also expected to hit the $100-billion mark. – Rappler.com

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