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By Katrina Mennen A. Valdez, Reporter
DESPITE the US slowdown or recession the people
in the local electronics and semiconductor industry—whose products
make up our No. 1 export category—see growth continuing, though
maybe at a lower scale.
And industrialists in our second-biggest export
category—garments and clothing accessories—have high hopes that
the new “blueprint” they are drafting will revive their sector
and make the Philippines the hub of the regional garment and fashion
industry.
Electronics account for 60 percent of exports
The electronics industry, which accounts for 60
percent of the total export revenue of the country, has been
affected by the US economic slowdown but the industry leaders see
nothing but growth this year.
“If [we] do better in the second quarter,
chances are growth would continue up to the end of the year,”
Ernie Santiago, president of Semiconductor and Electronics Industry
in the Philippines Inc., told The Manila Times in an interview.
SEIPI is the leading and largest organization of
foreign and local semiconductor and electronics companies in the
country.
He said the recession in the US has trickled
down not only to the Philippines. It has also dampened demand for
electronics products and semiconductors in Europe and Japan.
China’s demand, however, is still growing,
although currently at a slower pace. “Performance of the industry
in the Philippines will not gravely suffer relative to our
competitors in the region because the playing field is rather level
and balanced,” he said.
The category of electronics and semiconductor
manufacturing and exports is acknowledged as the main driver of the
Philippine economy as it accounts for almost 60 percent of the
country’s total exports. It has a workforce of 300,000 and sells
about P32 billion a year. (OFWs, if considered exports as left-wing
economists insists they are, is by far a much bigger category,
accounting yearly for at least $11 billion (P462 billion) in foreign
exchange remittances to the country.)
According to the National Statistics Office,
electronics (which includes semiconductors), accounts for 59.6
percent of the total dollar receipts in February this year. This
grew by 4.7 percent to $2.456 billion from $2.346 billion a year
ago.
The SEIPI president said that in contrary to
media reports, the Philippine electronics industry is not threatened
by China and other emerging rivals like Vietnam, since the country
offers a different advantage to its buyers.
“Despite the high electricity and relatively
less competitive labor cost, the Philippines remain as one of the
top choices for multinational companies because of [our] excellent
output,” he said.
In 2007, investments in the electronics industry
nearly doubled the figure in 2006. At end-December, investments in
the electronics sector came to $1.4 billion or 87 percent more than
the $747 million invested in 2006.
Santiago reported that the last time investment
in his sector exceeded the $1-billion mark was seven years ago.
“These investments were registered by 83 firms
who have considered relocating here and the expansion projects of
firms with existing base of operations in the country,” he said.
These 83 firms are expected to generate at least
24,212 jobs.
“The establishment and expansion of a new
plant of Texas Instruments in Clark have changed the mindset of most
technology companies who are putting money for new investments in
Asia. The Philippines has come to be magnet for many semiconductor
and electronics companies,” Santiago said.
Santiago said that during the past few months, a
number of companies have been visiting the country taking a second
look at the Philippines as a strategic choice for doing electronics
business.
These include small, medium and large
semiconductor and electronics manufacturing companies, including
support and allied industries.
“[We] are expecting to hit another more than
$1 billion of new investments for this year,” Santiago said.
Meanwhile, Trade Undersecretary Elmer C.
Hernandez, who is also the Board of Investments managing head, said
that as part of the agency’s after-care program for the investors,
BOI people are closely coordinating with the industry association in
a bid to sustain the satisfaction of investors and the growth
momentum.
“[We] have to take on China. The reports and
speculations of electronics companies leaving the country is not
only being experienced by the Philippines, but rather by the rest of
the Asean countries,” Hernandez said in an interview.
He said that the possible decision of some
companies to locate in China rather than in the Philippines, is
“insignificant” compared with what our neighboring countries are
experiencing.
“[We] are dealing with the multinational
companies [MNCs], thus the number of relocated operations to China
is insignificant because the bigger the firm is, the lesser the
chances that it would be lured by other countries,” Hernandez
said.
The DTI official said that the government is
after the bigger-ticket electronics or semiconductor investments,
since these investments are least volatile from the external
factors.
“[We] are after the bigger ones, which [we]
can offer higher-value services,” he said.
Garment industry blueprint for revival
Years after it lost its prized US quota of
products to import from here, the Philippine garment industry is
drafting a “blueprint” aimed at reviving itself and becoming
Asia’s fashion and clothing hub and the country’s single biggest
job-generating sector.
Ma. Teresita Jocson-Agoncillo, executive
director of the Confederation of Garments Exporters of the
Philippines (Congep), told The Manila Times that local products are
15 percent more expensive than those of China.
She said the government and the industry’s
leaders saw the opportunity to grow the industry after learning that
Shenzhen in China, the Philippines’ main competitor, had passed a
law that will increase the cost of Chinese products by at least 20
percent.
To be continued
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