No new investments expected for local electronics industry

No new investments investments are expected in the local electronics industry as a result of a sharp cut in demand due to the global economic downturn, the Semiconductors and Electronics Industries of the Philippines (SEIPI) said yesterday.

“The possibility that new investors will come in this year is slim. Everybody is trying to hold on to their money. Why would they lend money,” SEIPI president Ernesto Santiago said in a telephone interview.

In fact, Santiago said the demand has been going down. Before the crisis, the holiday season has been their peak. However, the worldwide financial crisis has strained the demand.

“We don’t have the official figures for November and December but it has been bad,” Santiago noted. “Usually the holidays are good because people would want to buy new cellular phones and computers,” he said.

“In 2008, we are down by five percent,” Santiago said. “This year the prognosis is bad.”

Santiago said they are uncertain if the decline will be in the double digits because these are “uncertain times.” “The plans we have for this month may not be applicable for the next month.”

Because of the continued drop in demand and the cancellations of orders by up to 10 percent to 30 percent, companies are implementing ways to cut costs and save.

In fact, the industry is implementing a four-day work week in an attempt to delay laying off workers as a result of a sharp drop in orders from international buyers.

“We have to manage this downturn. Some companies are already implementing a four day work week,” Santiago said. “It is better than laying off workers,” he added.

Santiago said he does not know how many companies have decided to cut costs by reducing the work week because it is a company level decision.–Ma. Elisa P. Osorio, Philippine Star 
Santiago said there are already some workers who were let go because orders were being cancelled. However, he said there is no data yet as to how many lost their jobs in the electronics industry.

Santiago said people who will lose their jobs are probably those who are performing non core responsibilities like the maintenance staff.

 “We might outsource the janitors instead of employing them because that would be cheaper for us,” he noted.

 He said the core staff are bigger than the non core people. “We need to think of ways to save money because these are hard times.”

 Despite the reduced work week, lay offs and cancelled orders, Santiago said no company is in danger of closing down. “There are no threats of any plant closure,” Santiago said.