The Philippine electronics industry expects to maintain a modest growth this year despite rising geopolitical tensions in the Middle East, but rising energy and logistics costs may eventually squeeze margins, an industry group said Wednesday.
Speaking on the sidelines of the ASEAN 2026 Business Environment Forum, Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) president Dan Lachica said the sector has avoided direct supply chain disruptions from the conflict involving Iran but is bracing for higher overheads.
“Right now, there’s no impact on the supply chain,” Lachica said.
“But obviously, the cost of fuel, transportation, and energy will eventually have an impact. The cost of operations will be increasing,” he said.
The electronics sector, the largest export group in the Philippines, is sticking to its 5-percent growth projection for 2026. Reaching this target would drive export revenues beyond $50 billion.
In 2025, exports reached $49.64 billion, falling roughly $20 million short of the record set by the industry in 2022.
Lachica said that direct export exposure to the Middle East is minimal, which shields the industry from immediate demand shocks.
Shipments remain concentrated in North America and Asia. Within Europe, Germany accounts for about 5 percent of exports and the Netherlands about 4 percent, while Middle East markets are “very minimal” and “not even on the radar,” he said.
While geopolitical uncertainty persists, Lachica said robust global demand for artificial intelligence infrastructure is boosting prospects for the Philippine supply chain.
However, new trade policies present potential risks. A 25-percent tariff on AI chips entering the United States could impact segments of the semiconductor ecosystem, but Lachica said the Philippines is partly shielded because it primarily produces supporting components rather than the AI chips themselves.
