By means of Justine Irish D. Table, Reporter
THE Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said it expects export growth of 5% next year, amid inventory corrections and the expected arrival of new investments.
“We maintained our expectation of a 10% contraction this year, but we see a 5% growth [in exports] next year,” SEIPI President Danilo C. Lachica told reporters on the sidelines of the 13e Arangkada Philippines Forum 2024 on Thursday.
He said next year’s growth will be driven by inventory adjustments and new product launches and expansion.
“Hopefully, with the government’s initiatives to promote investment, we are looking at new products and new expansions for the coming year,” he added.
SEIPI recently held its fourth quarterly meeting earlier this month and has another meeting scheduled for the first quarter of 2025.
‘We have another board meeting in the Ffirst quarter. And hopefully we confirm that 5% outlook,” he said.
Despite the optimistic outlook for next year, Mr Lachica said the board still expects a 10% decline in exports this year despite optimism in the electronic manufacturing services (EMS) sector.
“The EMS guys are optimistic, but the semiconductor guys are not. Unfortunately they weigh more than the EMS, [around] 70% of the volume,” he said.
A report from the Philippine Statistics Authority shows that the country’s top exports continue to be electronic products, which accounted for 52.9% (or $3.57 billion) of total exports in August.
However, the export value of the country’s electronic products exports showed a decline of 8.2% in August from the $3.89 billion worth of electronic products exported in the same month last year.
From January to August, exports of electronic products amounted to $27.45 billion, up 1% from $27.19 billion in the same period last year.
Of the total electronics exports, 76.6% were semiconductors, with a total value of $21.04 billion.
SEIPI had forecast a 10% decline in exports due to inventory adjustment and a less competitive product mix of exports from the Philippines.
In particular, Mr. Lachica said the Philippines is a bit disadvantaged because there are several companies that were not as aggressive in introducing new products and technologies in the country due to the rationalization of incentives implemented by the previous administration.
Meanwhile, the Department of Trade and Industry projected that Philippine exports would exceed the target of the Philippine Development Plan (PDP) 2023-2028, but would fall short of the targets of the Philippine Export Development Plan (PEDP).
The PEDP estimates that exports of goods and services will reach $143.4 billion by 2024, which is much higher than the export target of $107 billion under the PDP.
In June, the Development Budget Coordination Committee upgraded its projection for goods export growth this year to 5%, from 3% previously, following the ‘better than expected’ performance in the first quarter and amid an improved outlook for the economy . global semiconductor market.