TRADE Secretary Alfredo E. Pascual said he invited US chipmakers to set up wafer fabrication plants in the Philippines.

Speaking before a roundtable session at the Asia-Pacific Economic Cooperation (APEC) Summit 2023, Mr. Pascual said: “Within the semiconductor sector, the US, particularly through partnerships and support from the Semiconductor Industry Association (SIA) and the Semiconductor Equipment and Materials International (SEMI), stands out as a pivotal ally.” 

He said in an online briefing that he touted the Philippines’ advantages, which include strong economic growth, pool of young talent competitive business environment, strategic market access, and robust government support.

“We made a presentation to them and highlighted the fact that the Philippines is already very active on the back end of the semiconductor value chain because a lot of outsourced semiconductor assembly and testing (OSAT) is happening in the Philippines,” Mr. Pascual said at the online media briefing on Wednesday.

He added that on the front end, the country is also seeing an increase in the number of companies engaged in integrated circuit (IC) design.

However, despite the projected growth in OSAT and IC design industries, he said that the Philippines is still missing processes like wafer fabrication, where the facilities are known in the industry as fabs.

“In between is what is called the wafer fabrication that we don’t have yet in the Philippines. Taiwan semiconductor manufacturing companies supply a large share of the wafers sold globally,” he said.

Mr. Pascual said Philippine ambitions to enter fab industry have grown as the industry strives to avoid potential disruptions to the wafer supply originating from Taiwan.

“There are factories going up in the US and Singapore. Given that situation, we might start a wafer fabrication (hub) on a sort of pilot basis to be able to demonstrate that we can do it and to be able to complete the (semiconductor) value chain,” he said.

“But we will continue to work on attracting more investments on the OSAT side of the business as this is where we have established a strong track record,” he added.

Mr. Pascual said the Department of Trade and Industry is still identifying potential partners for wafer fabs, which may include smaller Taiwan producers.

“We are still identifying potential partners. We found out that there are other smaller players in Taiwan that we can tap. Right now, wafer fabrication operations are mainly in Taiwan,” he said.

“There are smaller producers in Taiwan that we might try to access and see to what extent we can partner with them, without giving up on the possibility of a major investment that might involve the bigger producers,” he added. — Justine Irish D. Tabile

THE Cooperative Code of the Philippines needs to be amended to clarify the industry’s tax-exempt status, the Philippine Chamber of Cooperative, Inc. (Co-op Chamber) said.

“The law was put up 15 years ago and the basis was the economic situation of the Philippines then. It is now time for it to be amended,” Co-op Chamber Board Member Alexander B. Raquero said at the launch of the chamber on Wednesday.

Established on July 24, the chamber seeks to lobby for regulation that will help cooperative enterprises thrive and help its members achieve their business goals.

“The Co-op Chamber wants to institute some of these amendments specifically on tax exemptions. We would like to pursue, maintain and sustain that … because we are the only one (serving) the unbanked groups in the countryside and even in the cities,” Mr. Raquero said.

Under the Philippine Cooperative Code of 2008, registered cooperatives which do not transact with non-cooperative members or the general public are not subject to tax.

“We want the law to be simplified and clarified because it is still open to interpretation. That is why most cooperatives right now are being audited by the Bureau of Internal Revenue (BIR) and some are even taxed,” Mr. Raquero said.

“The law states that as long as we transact with our members, we are tax-exempt… but we are still subjected to very specific taxes,” he added.

He said cooperatives want the law to be simplified along the lines of the exemptions for religious groups, which are not made to meet the same kind of conditions before being deemed eligible.

“The Philippine Constitution says that religious groups are tax-exempt without requiring them to pass anything. For cooperatives, there are a lot of requirements. Before we are recognized as tax-exempt, we need to submit papers to the BIR which will then issue us a certificate of tax exemption,” he added.

Mr. Raquero said that cooperatives want transactions with non-members to also be tax-exempt.

He added that the lending assistance to the industry needs to expand, saying that cooperatives can play a role in achieving food security. 

“Lending assistance should be increased for our farmers and fisherfolk,” he said.

The launch of the chamber is a call to action to address the challenges of poverty, inequality and discrimination, according to Co-op Chamber Founder Noel D. Raboy.

“(Our) mission is to empower organizations fostering a culture of solidarity, advocacy, education and networking within the cooperative community,” said Mr. Raboy.

The chamber advocates for skill-enhancing programs, creating networking opportunities for members, facilitating trade missions, and providing business development support.

“The chamber also seeks to secure grants and donations and to represent the cooperative industry’s interests to government agencies,” Mr. Raboy said. — Justine Irish D. Tabile