The inability of the country to attract more foreign direct investments (FDIs) is affecting the output of the country’s semiconductors and electronics industry.
The Semiconductors and Industries in the Philippines Inc. (Seipi) said that the industry needs $3.5-billion worth of FDIs to meet the $38-billion export target for 2016.
“It’s challenging [to achieve the $3.5-billion FDI for the $38-billion target], but I think it is doable,” Dan Lachica, Seipi president, told The Manila Times in a roundtable discussion, adding that recently, the industry only got $750,000 in FDIs.
Lachica noted that FDIs would come into the country if the government would intensify “country promotion, peace and order, and sustaining minimum wage cost.”
He also mentioned that government agencies should take action: the Department of Energy to pursue power cost reduction; the Department of Finance to maintain and not take away subsidies that benefit existing and emerging industries; and for the Department of Justice (DOJ) and the Philippine National Police (PNP) to address peace and order issues.
“The DOJ and PNP should maintain the comfort level assurance to the expats that they are safe here in the Philippines. Of course, they should advise them to not do something stupid just like going to Mindanao. Just let them stay in Metro Manila,” Lachica said.
He also said that on the part of local suppliers, they should not commit to something that they cannot deliver.
He said that there are local suppliers who have a tendency to “say yes” when asked of their capabilities, which becomes a problem to foreign investors and companies doing business in the country.
“One of the problems that our local suppliers face, when you ask them can you do this, they will automatically answer ‘yes’ without thinking,” Lachica said in reference as to why foreign investors from electronics industry do not localize their supply chains in the Philippines, and instead bring their own supply chain into the country.
Seipi has finished drafting the roadmap for the Philippine semiconductors and electronics industry, and projects exports to hit $52 billion employing directly 14 million people by 2030.
However, if the government invests in infrastructure and addresses issues related to attracting more FDIs, Seipi sees outward shipments of semiconductors and electronics hitting $112 billion by 2030 and directly employing 37 million people. For everyone person directly employed in the electronics and semiconductor industry, seven more are employed indirectly, including those who supply the food needs of workers.