The electronics industry has upgraded its growth forecast again, on the back of increased global demand and the consumption-boosting drop in global oil prices, opening up the possibility for the country’s total exports to exceed the targeted 10-percent increment for 2014.
“We are actually revving up our projection. That 5 percent-to-8 percent [growth range], we came up with that revision just this last quarter. But given the information we have today, feedback from our members, we are upgrading that projection to a range of 7 percent to 11 percent for 2014. Then, for 2015, probably too early to really say, but we’re thinking initially a 5-percent to 7-percent growth,” Semiconductor and Electronics Industries of the Philippines Inc. (Seipi) President Dan Lachica said.
Also, Seipi Chairman and IMI Electronics President Arthur Tan said part of the growth this year can be credited to the substantial plunge in global oil prices.
“The overall market is on a consumption basis. All the major economies are ramping up consumption and that is taking effect now. Part of that consumption is in goods and services…the goods are partly driven by electronics so that part of the growth will see more components being sourced out of the Philippines,” Tan said.
For 2015, growth is initially seen at 5 percent to 7 percent, which takes into consideration the effect of coming from a higher base this year, Lachica said, while stressing essentially the same factors will drive up exports of the industry next year.
The automotive and the telecommunications industries in particular, have been propelling demand. Vehicle sales, not just in the Philippines but also in China, are spiking, Tan said, while the proliferation of wearable devices and smartphones are contributing to the growth, as well.
“We don’t see inflation to be a very large looming problem. The cost of energy is going down and cost of oil is also going down; these are ancilliary effects, but the overall consumption effect, the goods and services will
have a deflationary effect, so from that perspective we see more volume coming out of semiconductor and
electronics-based industry,” Tan added.
According to the Philippine Statistics Authority, from January to October this year, electronics exports already totaled $ 20.95 billion, taking up 40 percent of the total year to date export receipts of $51.7 billion.
Total exports in 2013 closed at $78.5 billion. The country’s exports industry set a growth of 10 percent for 2014, while the government, as set in the Philippine Export Development Plan (PEDP) 2014-2016, is expecting a more-modest 8-percent growth.
The country’s total exports is expected to grow 9 percent in 2015 and 10 percent in 2016, based on the final draft of the PEDP submitted to President Aquino.