THE Semiconductor and Elec-tronics Industries in the Philippines Foundation, Inc. (SEIPI) reported on Wednesday that it recorded US$49.09 billion worth of exports in 2022, a 6.88-percent annual growth from 2021.
According to SEIPI, this was 62.27 percent of the US$78.84-billion total Philippine commodity exports.
The major organization of foreign and Filipino electronics companies in the Philippines said in a statement on Wednesday the local semiconductor industry, together with its 3 million direct and indirect workers and opportunities brought by the developments in the global industry, remains as a “significant driver” of economic growth that can support the Philippines in sustaining its growth momentum.
For 2023, SEIPI President Danilo C. Lachica has set the export growth target for the industry at 5 percent, citing slower global demand as the reason. In 2022, SEIPI set its growth target at 10 percent.
According to an Oxford Economics report released on December 5,2022, “The semiconductor cycle has already turned and is likely to continue softening into next year. As the world’s largest producer of chips, Asia is set to bear the brunt of the hit to growth, although this unlikely to be uniform overall and will depend on the type of chips each country produces.”
With this, SEIPI divulged that it continues to voice legislative and regulatory concerns in order to enhance the industry’s competitiveness and the country’s attractiveness to foreign investors.
In fact, the organization said it devoted the first quarter of the year to meeting with the Department of Trade and Industry (DTI) and Department of Finance (DOF) Secretaries as well as the Philippine Economic Zone Authority (PEZA) and Bureau of Customs (BOC) officials to discuss the industry’s concerns and recommendations.
Among the concerns, SEIPI revealed, are the low electronics industry foreign direct investments (FDIs), high operating costs, issues on the BOC’s X-Ray Selectivity System and implementation of the Electronic Tracking of Containerized Cargo (ETRACC) system.
More concerns are the appeal to adopt the work-from-home (WFH) arrangement for non-manufacturing departments, and the Bureau of Internal Revenue (BIR)’s imposition of the 12 percent value-added tax (VAT) on constructive exporters and production support functions.
Moving forward, the organization said its technology-related initiatives are guided by the electronics industry roadmap called the Product and Technology Holistic Strategy (PATHS).
“The roadmap includes plans to set up an IC [Integrated Circuit] Design Training Laboratory (ICDL) and a lab-scale wafer fab,” SEIPI said.
Moreover, SEIPI said its members have identified additional products and advanced technologies to include in the roadmap and have the potential to move the industry up the global value chain.
The organization also unveiled that its Parts Localization Technical Working Group (TWG) has tapped more “local suppliers and manufacturers to enhance their capacities to supply critical materials for the electronics member-companies.”
It stressed that the linkage aims to minimize “dependence” on imported materials under three
categories.
After localizing P321.3 million worth of imported parts and materials last year, SEIPI said TWG targets to locally source more items this year, focusing on chemicals, plastics, and packaging materials.
Image credits: Nonie Reyes