An industry group said Tuesday electronics exports, which account for more than half of the country’s total exports, are expected to fall between 20 percent and 26 percent in 2020 amid the pandemic that affected both demand and production.
The Semiconductor and Electronics Industry of the Philippines Inc. said the country’s outbound electronic shipments could drop to $32 billion this year from $42.32 billion in 2019. SEIPI bared the industry forecast during a virtual forum on supply chain hosted by the German Philippine Chamber of Commerce and Industry.
“This is going to be a significant drop, where our initial forecast was about 5 percent growth before COVID, it looks like we’re gonna be coming in at a contraction of 20 percent to about 26 percent,” said SEIPI president Dan Lachica.
Electronics imports were also expected to decline by 26 percent this year, according to the group.
Lachica said the pandemic had affected operations of export-oriented industries, leading to the transfer of volume to other plants outside the Philippines.
“So we’ve lost about 15 percent of our volume to two plants outside the Philippines and I doubt if we will be able to get that back again,” he said.
He said the scheme is a part of the single liability or the so-called single country risk that multinational companies were avoiding especially in times of recession.
“That’s why there is a need to develop local sourcing of raw materials, and we’re not quite there yet. We’re still working on it,” Lachica said.
He said that while single sourcing is good for loyalty and developing trust with business partners, multi-sourcing or having alternative sources is a responsive policy that will insulate semiconductor companies from international developments.
Data from the Philippine Statistics Authority showed that exports of electronic products amounted to $2.29 billion in May, down by 33.4 percent from $3.44 billion in the same month last year.