Electronics industry’s growth seen slowing down to 8%

MANILA, Philippines – The electronics industry will likely grow by a slower eight percent this year due to the impact of the twin disasters in Japan, the Semiconductors and Electronics Industry of the Philippines Inc. (SEIPI) said.

In an interview on the sidelines of the group’s general membership meeting, SEIPI president Ernesto Santiago said they will be able to hit only the lower half of their export target because of the continued abnormal operations in some Japanese firms.

Before the earthquake and the tsunami, struck Japan, SEIPI was expecting a growth range of eight to 12 percent this year. Electronics is the biggest export product of the Philippines.

Santiago said while the first quarter export figures were hardly affected, the impact will be felt in the second quarter. “Definitely there will be a slowdown because there was a disruption in supply.”

The supply issue, Santiago said, may lead to higher costs for manufacturers.

“The long term effect is difficult to quantify because this is more severe than the other disasters,” Santiago said. “The situation is volatile right now so most companies would not like to disclose the real score.”

He said electronic firms are now considering other sources of raw materials like China, although he pointed out that some parts are available only in Japan.

He explained that the Japanese are very nationalistic and thus would like to keep their production in their own country. Likewise, there are some specialized parts that are only produced in Japan in order to protect trade secrets.

Earlier, Philippine Exporters Confederation Inc. (Philexport) president Sergio Ortiz-Luis said they will reach their export targets in spite of the work disruption in Japan and the crisis in the Middle East.

“We still have a buffer because we grew by 25 percent last January,” he explained. For the first quarter, they expect export growth to be at about 20 percent because these businesses were not affected yet, adding that they expect only second quarter figures to suffer. –Ma. Elisa P. Osorio (The Philippine Star)