THIS YEAR’S electronics export target under the Philippine Export Development Plan (PEDP) will be difficult to achieve because of global headwinds, the top official of an industry group said on Wednesday.
“The 2023 target of $53.7 billion for electronics may be tough given the global situation,” said Danilo C. Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), in a Viber message.
Launched on June 15, the PEDP 2023-2028 estimates dollar receipts from electronics and electrical exports to gradually increase and reach $106.4 billion in 2028, or 44.2% of the estimated $240.5 billion worth of merchandise and services exports by that year.
Mr. Lachica said achieving the higher export value target will be “tough” amid global challenges.
In an interview with Market Edge, he said: “We’re facing a major handicap even in 2023 because the projection is $53 billion.”
“That target may be at risk for 2023,” Mr. Lachica told the television program on Wednesday, citing high power and logistics costs among the challenges hampering the sector’s growth.
“Admittedly, it’s been tough,” Mr. Lachica said. “We also see the impact, still, of the Russia-Ukraine war and other geopolitical factors. Of course, soaring costs in logistics, high cost of power, and labor.”
“Hopefully we take some action… I’m hoping again for proactive government conversations with them would help them understand what the issues are,” he added.
Under the PEDP, the overall exports target for the Philippines for 2023 is set at $126.8 billion, of which $53.7 billion or 42.4% will come from electronics and electrical exports.
In contrast, SEIPI is eyeing a 5% electronics export growth for 2023, equivalent to about $51 billion, versus the record-high $49.09 billion worth of electronics exports recorded last year.
However, the local electronics sector is off to a bad start as its exports contracted by 15.3% to $9.97 billion in the first quarter.
Despite the decline, Mr. Lachica said the group remains optimistic that it would hit its 5% exports growth target for 2023 set earlier in the year.
“We’re still holding on to the 5% growth. We’re still being optimistic and hopefully, the demand will turn around when we approach the holidays,” Mr. Lachica said in the television interview.
“By 2022, we actually hit about $49 billion [worth of exports], which is a record. Safe to say that we’ve fully recovered and we’re ready to face the headwinds and continue the growth of the industry,” he added.
Meanwhile, Mr. Lachica said the benefits of the Regional Comprehensive Economic Partnership (RCEP) trade agreement will not be felt immediately by the local electronics sector.
“Free trade agreements (FTAs), bilateral, or RCEP, or the Indo-Pacific Economic Framework for Prosperity (IPEF), they are always good for the country. But in particular, most of the electronics items are duty-free. We will see [an] impact, not necessarily immediate. But we will see that kind of impact,” Mr. Lachica said.
“But I think the biggest concern for our industry is looking into why we are not getting the new investments, and products, and technologies,” he added.
RCEP, which officially entered into force for the Philippines on June 2, is a trade deal that involves the 10 members of the Association of Southeast Asian Nations plus Australia, China, Japan, Korea, and New Zealand.
Touted as the world’s biggest FTA, RCEP is expected to improve trade among participating nations with the implementation of lower or zero tariffs.
Mr. Lachica also said that he would join the Belgium and Netherlands legs of the Philippine Trade department’s Europe Investment Roadshow, which began on June 18 and will end on July 6.
“Hopefully, we can still have more European business for electronics,” Mr. Lachica said. — Revin Mikhael D. Ochave
