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Electronics exporters confident of 2019 goal

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electronics semiconductor

By Jenina P. Ibañez

THE COUNTRY’s electronics manufacturers expect to hit their conservative export growth target this year, the head of the industry group said in an interview on Thursday, banking on the seasonally strong period for sales this quarter.

Danilo C. Lachica, president of the Semiconductors & Electronics Industries in the Philippines Foundation, Inc. (SEIPI), said the sector should easily meet and could even exceed the tempered 0-3% 2019 target set last semester, based on year-to-date data.

Citing data from his group, Mr. Lachica said: “So we’re at 2.6 today. I think we’ll exceed [the target], believe it or not,” noting that “the momentum, the pipeline, is already running.”

“The nature of the industry is [such that] the biggest demand is coming into Christmas.”

Electronics accounts for more than half the country’s total overseas sales of goods.




Preliminary Philippine Statistics Authority (PSA) data show a slower 1.905% year-on-year rise in value of electronics export sales to $26.054 billion in the eight months to August, easing from the 5.7% growth recorded in the same period last year, again using preliminary data.

Semiconductor shipments, which contributed 73% to total electronics shipments, edged up by 0.441% to $18.96. billion.

The five other electronics segments that increased overseas sales were: communication/radar, by 41.281% to $676.818 million; consumer electronics, by 19.211% to $550.704 million; office equipment, by 46.872% to $505.021 million; telecommunication, by 13.464% to $436.5 million; and automotive electronics, by 4.903% to $92.555 million.

The three electronics segments that sold less than a year ago were: electronic data processing, by -1.058% to $4.255 billion; control and instrumentation, by -7.27% to $541.741 million; and medical/industrial instrumentation, by -25.342% to $35.213 million.

Preliminary PSA data showed total electronics exports growing by 2.828% year-on-year to $37.569 billion, accounting for 55.67% of $67.488-billion total merchandise exports.

Weighing on industry sentiment, however, is uncertainty over the final version of the proposed Corporate Income Tax and Incentives Rationalization Act (CITIRA), now being deliberated in the Senate, that will overhaul fiscal incentives by making them more time-bound, transparent and tied to clear benefits to the economy.

Mr. Lachica said such uncertainty has prompted some investors now operating in the Philippines to consider other countries for their expansion, with one company — which he declined to name — deciding to shut down by yearend.

“Maybe it’s a strategic decision, but obviously some of it is partly related to the concerns with what’s going on in our country,” Mr. Lachica said.

“But it’s just an ongoing concern that if we don’t see refinement of CITIRA, we could see more,” he added.

“We want to prevent that.”

SEIPI’s recommendations for CITIRA include, among others:

• retain the five percent tax on gross income earned (GIE), in lieu of all national and local taxes, after expiration of the income tax holiday for existing investors who meet performance criteria under the new law;

• increase the GIE tax to seven percent, again in lieu of all national and local taxes, for new and expansion projects;

• and remove the five-year cap on import duty exemption of equipment, parts and materials.

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