Investments to sustain rapid growth of electronics exports, says SEIPI

MANILA, Philippines - The impressive rebound of the electronics industry can be driven into sustained high growth if the Philippines embarks on an aggressive investment promotions campaign aimed at luring in the big multinationals, officials of a major electronics association said.

Semiconductor and Electronics Industry in the Philippines, Inc. (SEIPI) president Ernie Santiago and chairman Arthur Young stressed their view in a press conference on the sidelines of this year’s trade exhibit at the SMX convention halls in Pasay.

“The multinationals are now reviewing their global strategies and they are determined to make a presence in Asia,” Santiago said.

“They realize that China is not the only player. The reality is, the China plus plus scenario is at work and the Philippines must be made part of the investment destinations,” he explained.

He explained that the country must take full advantage of the smooth transition of government recently pulled off while Thailand is still struggling to form a new government.

“You must get out and get the investments,” added Young. “It all redounds to investments. If you order new machinery for added capacity today, it will be six months before it gets delivered, and two years to reap the higher growth. Texas Instruments (TI) decided to expand in Clark in 2007. It is reaping the dividends this year.”

The electronics industry leaders further pointed out that the spectacular growth of their industry in the 1990s that peaked at $2.16 billion in 1995 fueled double-digit annual growth in export. This sector propelled electronics to be the country’s leading export and since then captured at least 60 percent of total export revenues.

Investments slowed down in the past decade but jumped again to $1.4 billion in 2007 on the back of the decision of TI to put up its new manufacturing facilities at the Clark Freeport.

At the rate the industry has been recovering, its leaders expect exports this year to edge the performance in 2008 at $29 billion yearly sales. Their previous projection is a growth of about 29 percent this year which actual figures in the first four months have been revising upwards.

“A 45 percent growth will overtake exports of $31 billion in 2007 which may not yet be attained,”Santiago said. Robust growth is still expected next year but may not be as spectacular as this year due to under capacity of the local plants.