SEIPI projects single-digit growth in electronic exports

Philippine exports of semiconductor and electronic products may see single-digit growth this year, but uncertainty over the US tariff policy continues to cloud the industry’s outlook, the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said.

“We’re looking forward to a single-digit growth, which means anywhere from 1% to 9%,” SEIPI President Danilo C. Lachica told reporters on the sidelines of the Philippine Semiconductors and Electronics Convention and Exhibition on Tuesday.

“My official position is still flat [growth,] but like I said before, there are signs of a positive outlook, modest growth,” he said.

Citing the latest trade data, Mr. Lachica said there are signs of export growth.

“If you look at the PSA (Philippine Statistics Authority) numbers, it looks like we might look forward to that modest growth, a single-digit growth. But now, the projection for the industry is still flat,” he said.

PSA data showed that as of end-August, exports of electronic products reached USD 29.48 billion, 7.4% higher than a year ago. Semiconductor exports during the period likewise grew by 4.9% year on year to USD 22.07 billion.

The SEIPI board is set to meet in November to review its industry projections.

“Even though I’ve seen positive movement, I was hesitant to declare, ‘OK, we’re going to grow,’ because who knows what’s going to happen with the US tariffs,” Mr. Lachica said. “It depends on what side of the bed Trump wakes up on.”

US President Donald J. Trump earlier threatened to slap sectoral tariffs on chips as high as 300%, a move expected to bring back manufacturing to the US.

At present, semiconductor exports are not included in the 19% tariff imposed by the US on Philippine-made goods.    

The US Supreme Court is set to hear oral arguments on Nov. 5 on the legality of Mr. Trump’s tariffs.

“We’ll just continue to ride the wave of zero-percent tariffs for semiconductors and some selected EMS (electronics manufacturing services) products,” Mr. Lachica said.

The SEIPI official said Philippine exports of electronics and semiconductors to the US have declined since the tariffs took effect in August.

“The US Embassy called me and asked, ‘Why are the exports to the US decreasing?’ I said, ‘Why do you think?’” Mr. Lachica said.

The electronics industry is looking to diversify its trade relations with the European Union (EU) and the rest of Asia to mitigate the risks of the US’ uncertain tariff policies, Mr. Lachica said.

“One of the strategies, notwithstanding the progress of the tariff, is we’re looking at diversifying our markets, whether that’s the EU or whether that’s with the rest of Asia,” he added.

Meanwhile, Mr. Lachica said the ongoing corruption scandal involving infrastructure projects is a “major concern” for the industry as investors may reconsider expansion plans in the country.

Asked if corruption in government is affecting investor sentiment, Mr. Lachica replied: “Absolutely.” — Beatriz Marie D. Cruz