Electronics export growth at risk due to COVID-19

by Louella Desiderio (The Philippine Star) – 17 Feb 2020

MANILA, Philippines — The country’s electronics exports are at risk, with growth lower than projected this year if the supply chain disruptions brought by the COVID-19 outbreak are prolonged.

Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI) president Dan Lachica said in a text message that the electronics industry is grappling with the severe disruption of their supply chain caused by the COVID-19 outbreak.

“Our five percent growth forecast for 2020 is at risk because 40 percent of our supply comes from China and Taiwan,” he said.

He said some SEIPI members would be shutting down production lines in a few weeks.

Some factories in China supplying parts to other companies remain closed to prevent the further spread of COVID-19.

The disease was first seen in Wuhan, China and has symptoms like fever, cough, and shortness of breath, but could lead to pneumonia in more severe cases.

“If COVID-19 is prolonged, growth could shrink by as much as 50 percent,” Lachica said.

He said the country’s electronics exports reached over $40 billion last year, accounting for 61 percent of total exports.

Earlier, Trade Secretary Ramon Lopez said Philippine manufacturers sourcing parts or materials from factories that have suspended operations in China are expected to look for temporary alternative sources.

Lopez has also met with manufacturers to ask them about plans for alternative sourcing of parts and materials.

Asked if finding alternative sources for parts could be done by SEIPI members, Lachica said doing so would take some time.

“Sourcing parts from another supplier requires months of qualification,” he said.

Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis Jr. said the group is hopeful the spread of COVID-19 could be contained and would not be protracted as it has already affected performance of exports including electronics.

He said the electronics sector is among those expected to drive the growth of the country’s total exports this year.

“We’re banking on the electronics sector for growth this year. They expect around five percent growth. So, we hope this (COVID-19 outbreak) will not last long,” he said.