Electronics industry targets 5% increase in exports next year

The Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said that it is expecting a 5% growth in exports next year amid inventory correction and the expected entry of new investments.

“We maintained our outlook of 10% contraction this year, but we see 5% growth [in exports] next year,” SEIPI President Danilo C. Lachica told reporters on the sidelines of the 13^th Arangkada Philippines Forum 2024 on Thursday.

He said next year’s growth will be driven by inventory correction and the launch of new products and expansion.

“Hopefully, with the initiatives of the government to promote investments, we are looking for new products and new expansions for the coming year,” he added.

SEIPI recently held its fourth-quarter meeting earlier this month and has scheduled another meeting for the first quarter of 2025.

“We’ll have another board meeting in the first quarter. And hopefully, we’ll affirm that 5% outlook,” he said.

Despite the optimistic outlook for next year, Mr. Lachica said the board still expects a 10% decline in exports this year despite the optimism in the electronic manufacturing services (EMS) sector.

“The EMS guys are optimistic, but the semiconductor guys are not. Unfortunately, they weigh more than the EMS, [around] 70% of the volume,” he said.

A report from the Philippine Statistics Authority showed that the country’s top exports are still electronic products, which accounted for 52.9%, or USD 3.57 billion, of the total exports in August.

However, the export value of the country’s electronic product exports in August showed an 8.2% decline from the USD 3.89-billion worth of electronic products exported in the same month last year.

From January to August, exports of electronic products reached USD 27.45 billion, representing a 1% increase from USD 27.19 billion in the same period last year.

Out of the total electronics exports, 76.6% comprised of semiconductors, which had a total value of USD 21.04 billion.

SEIPI had projected a 10% decline in exports due to inventory correction and a less competitive product mix of the exports from the Philippines.

In particular, Mr. Lachica said that the Philippines is a bit disadvantaged because there were several companies that were not as aggressive in putting in new products and technologies in the country due to the incentives rationalization implemented by the previous government.

Meanwhile, the Department of Trade and Industry projected Philippine exports to surpass the target set under the Philippine Development Plan (PDP) 2023-2028, but miss the targets set under the Philippine Export Development Plan (PEDP).

The PEDP estimates merchandise and services exports for 2024 to reach USD 143.4 billion, which is much higher than the USD 107-billion export target under the PDP.

In June, the Development Budget Coordination Committee upwardly adjusted its projection for the growth in merchandise exports this year to 5% from 3% previously, due to the “better-than-expected” performance in the first quarter and amid an improved outlook for the global semiconductor market. – Justine Irish D. Tabile, Reporter