A likely contraction in the country’s electronic exports will be less than 10 percent, smaller than previously projected, according to the head of the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi).
Danilo Lachica, Seipi president, on Wednesday noted an improvement in market conditions, driven by progress in inventory correction and a gradual resumption of demand.
“I’m seeing a glimpse of reducing that contraction. But officially, we’re not yet reducing the 10 percent,” Lachica said at the sidelines of an event hosted by the Manila Business Club. “The demand is resuming… But it is still a challenge, especially on the semiconductor side, which is 70 percent of our demand.”
Data from the Philippine Statistics Authority in July showed electronic products remained the country’s top export with $3.25 billion in revenues, or 52.1 percent of the country’s total exports during the period.
From January to July, electronic exports amounted to $23.88 billion, up by 2.5 percent from the $23.3 billion in the same period last year.
In 2023, the Philippines exported $41.91 billion worth of electronic products.
If the Seipi’s projection is accurate, a 10-percent decline in exports will translate to $37.72 billion in income this year.
Lachica attributed the contraction to the ongoing inventory correction and challenges related to the product mix in the Philippines’ semiconductor industry. He said many companies have been hesitant to introduce new products and technologies due to changes in government incentives in the previous administration.
Further updates on export projections are expected in early 2025, Lachica said, as he expressed optimism on recent legislative developments, particularly the Corporate Recovery and Tax Incentives for Enterprises Maximize Opportunities for Reinvigorating the Economy (Create More) bill, which the Senate has approved on third and final reading.
Lachica cited provisions in the bill which will draw more investments, such as the reinstatement of the 5-percent gross income earned incentive and other measures to streamline bureaucratic processes.
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