THE Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) have expressed concern about the electronic exports target of $80 billion by 2027 in view of the increasing competitiveness of the country’s neighbors like Vietnam.
“I am concerned that we may be losing our competitiveness. How so? Not to preempt the release of the [Philippine Export Development Plan] PEDP tomorrow at PICC…the Plan calls for $80 billion of electronic exports by 2027 and $90 billion by 2028 but I’m seriously concerned about that,” SEIPI President Danilo C. Lachica said at the 11th Arangkada Philippines Forum: “Reform, Rebuild, Recover.”
The SEIPI chief noted how investments are being directed to the Philippines’s Asean neighbors such as Vietnam. “In the past couple of years while there had been trickle of investments in new products and technologies which is the lifeblood of our industry, a lot of it has been going to our Asean neighbors, in particular Vietnam.”
Lachica said the redirection of the investments from the Philippines to its Asean neighbor countries can be traced to the country’s high power, logistics, labor and water costs.
This has been the SEIPI chief’s complaint in the past few months. In fact, he stressed in October that while a devaluating peso is good for exporters, that’s now offset by high power and fuel costs, among others.
Earlier, Lachica underscored that about $3.2 billion of investments that could have gone to the Philippines were instead moved by multinational firms to other countries including Vietnam, Thailand, Malaysia, and China, due to issues on the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law, particularly the rationalization of incentives.
Lachica also stressed that leveling the playing field in operating cost is important because “from the multinational’s perspective, incentives or not, they’re (investors) gonna go to the country which gives the most competitive operating cost in terms of cost per unit.”
In a statement a month ago, Philippine Exporters Confederation Inc. (Philexport) President Sergio R. Ortiz-Luis Jr. said the next Philippine Export Development Plan will be “more aggressive” to combat issues such as rising business costs and supply chain disruptions.
“The next Philippine Export Development Plan is more aggressive, highlighting technology and stronger collaborations towards innovation, skills upgrading, and integration to help counter the negative impacts of issues such as red tape, supply chain disruptions, increasing business costs, climate change, and other challenges,” said Ortiz-Luis Jr., in a statement shared by the Department of Trade and Industry (DTI) on Wednesday.
The DTI, through the Export Marketing Bureau (EMB), in partnership with the Export Development Council (EDC) and the Philexport, is set to resume the onsite conduct of the National Exporters’ Week (NEW) activities from December 1 to 7, 2022.
The PEDP for 2023-2028 will be launched during the 2022 National Export Congress (NEC) on December 7. The DTI said the NEC will cover discussions on how the government aims to pave the way for “exporting breakthroughs” in the next six years.
“The PEDP shall define the country’s medium-term and annual export thrusts, strategies, programs and projects, and shall be jointly implemented by the government, exporters, and other concerned sectors,” the DTI said in the NEC invitation.
Image credits: Nonoy Lacza