MANILA, 23 April — The Philippine electronics and semiconductor industries registered double-digit growth rates in 2000. As a result, electronics and semiconductor exports accounted for 75 percent of Philippine exports. For this year, analysts see a different scenario for these sectors based on a recent report by the National Statistics Office (NSO), which showed that imports of electronics and components went down 45 percent in February compared to the same month last year.
A slowdown in imports of electronics and components means less output for Philippine manufacturers. At present, the country processes the raw materials — mostly from Japan and the US — and then returns the raw materials for finished products back to these countries.
Industry experts said the electronics and semiconductor industries are anticipating a slower growth in the United States in the first half of 2001. This is the reason Philippine manufacturers exporting to the US have adjusted their requirements, they said. If industry experts believe that the US economy will recover in the second half of 2001, Philippine manufacturers have joined the growing number of companies bracing for difficult times ahead.
“The Philippine electronics and semiconductor industries are adversely affected by the slow demand in the global market, particularly in the US,” said Saturnino Belen, president of the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI). SEIPI is the leading and largest organization of foreign and local semiconductor and electronics manufacturers in the country. It has 132 members that include US and Japanese multinational manufacturers.
Belen said the consensus among industry leaders is that the Philippine electronics and semiconductor industries will register a single-digit growth this year. “SEIPI is projecting a nine percent growth rate for these sectors in 2001. We do not see any developments that would support double-digit growth for electronics and semiconductor products this year,” he said.
Despite the weakening demand in the global market, some industry players in the Philippines are assured of continued business because of their dedicated production lines that are covered by multi-year guaranteed contracts. “We believe the weak market was brought about by maturing technologies and products and the failure of new technologies to come on stream and take off. For example, the wireless and other advanced communication technologies, including the Bluetooth technology, have not really taken off,” Belen said.
Bluetooth is a name for a technology specification for short-range radio links between mobile computers, mobile phones and other portable electronics products. The Bluetooth technology, therefore, results in an inexpensive, short-range radio interface that connects diverse mobile devices with household appliances.
To help Philippine manufacturers weather the hard times, SEIPI has submitted a proposal to President Gloria Macapagal Arroyo for the establishment of a Philippine investment promotion office in Silicon Valley to attract US investors to come to the Philippines. “The Philippines should be more aggressively promoted in Silicon Valley, the center of global electronics and IT industries, if the government hopes to sustain the growth of Philippine electronics and semiconductor exports,” Belen said.
SEIPI earlier urged the Arroyo administration to provide a stable and predictable business environment to attract more foreign investments, particularly in the electronics and semiconductor sectors.