By Justine Irish D. Tabile, Reporter
THE Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said it is maintaining its forecast of flat to modest growth for exports this year, with increasing demand possibly offsetting the impact of US tariffs.
SEIPI President Danilo C. Lachica said exports of semiconductors and electronics are being driven by artificial intelligence (AI) and data centers.
“It’s just a matter of navigating the economic and geopolitical considerations, specifically for semiconductors, the US tariff,” he told reporters on Tuesday.
“In fact, while we projected flat growth this year, we’re not predicting doom and gloom, so we’re still maintaining our forecast. And maybe, optimistically, some modest growth, notwithstanding the US tariffs,” he added.
He said that if export growth for the first seven months is annualized, exports could top $42 billion.
“Then again, a lot of things can happen with all the geopolitical uncertainty; it would be prudent to just say exports will be flat with some optimism for modest growth,” he added.
The Philippine Statistics Authority (PSA) reported that exports of electronic products totaled $25.61 billion at the end of July, up 7.2%.
Ines Lam, associate director for Asia economics at HSBC, said the sector-specific tariffs that are yet to be imposed by the US remain a worry, especially for Asian economies.
“Tariffs on semiconductors and pharmaceuticals have not been announced yet. They are in a different basket, and pretty soon, I think Trump will announce what final tariffs he will put on these industries,” she said.
“For Asia, it’s especially important, and that’s because a lot of Asian economies export quite a lot of semiconductors, electronics, and pharmaceutical products to the US. And for the Philippines, electronics are more than half of its exports to the US. The impact of that will be significant,” she added.
She said electronics have been doing well mainly because they are still exempt from tariffs, because of frontloading of exports before the tariffs came into force, and because of AI.
“Exports so far are doing okay, but I’m afraid that we may not be able to say the same in the next few months, when the tariff effects really kick in,” she added.
Mr. Lachica said that even if tariffs are imposed, the demand for electronics and semiconductors will continue to be there.
“The price points will decrease, somebody has to shoulder the higher cost, but the demand will still be there,” he said.
“I don’t think it’ll happen this year. So, we’ll just continue doing what we do, producing the chips based on demand,” he added.
He said it usually takes three to six months before any impact is felt in the Philippines.
“We’re just going by the conditions today and it is business as usual … From a business perspective, you shouldn’t be skittish and act like a scaredy-cat. You just respond to what you know today and not have to fret about what could happen,” he added.
He said that the electronics industry is looking at diversifying markets, particularly in the European Union (EU) and the Association of Southeast Asian Nations.
“But we’re still holding on to maintaining our (share), if not growing the share of the Philippines. Because the semiconductors in the Philippines (account for) about 5% of global demand. And we haven’t really seen a drop,” he said.
“Of course, manufacturers will go to countries or sites where there’s lower cost. But I think we’ll maintain our US share and hopefully increase it and grow the demand from Europe,” he added, noting the need for more export promotion to the EU.