Vice-President Leni Robredo said the Philippines can invest in microchip manufacturing to be able to produce higher value products for exports as part of her strategy to revive local manufacturing when elected as president of the country in the May presidential derby.
Robredo, one of the awardees of the Semiconductor and Electronics Industries of the Philippines Foundation Inc. (SEIPI) Partner of the Industry Awards, spoke at the organization’s General Membership Meeting and discussed her plan to revive domestic manufacturing. SEIPI is the country’s largest organization of the country’s largest foreign investments in semiconductor and electronics industries.
“We can invest in industries like microchip manufacturing,” said Robredo as she stressed the importance of the technology and the manufacturing industries.
“Our goal now is to grow our downstream industries to ensure we manufacture and export higher value products. We can capitalize on this by processing and using semiconductors domestically,” said the independent candidate for the May presidential derby.
Robredo, widow of the late Interior and Local Government Secretary Jesse Robredo, said the Philippines should take advantage of the global shortage in microchips caused by reduced production due to the pandemic. Producing microchips, she said, would help local businesses produce higher value exports and other critical products required in huge economies such as the US and China, she said.
By also improving local manufacturing capacity, Robredo said, this will attract more investments and more jobs to uplift the lives of Filipinos.
With that, Robredo said she will craft and implement industry roadmaps. To maximize resources, she cited the need the need to “build strong links between different industries so ensure that everything we need from upstream to downstream industries can be manufactured in the Philippines.”
To support domestic industries to thrive, Robredo also cited the importance of infrastructure and logistics.
Robredo, however, stressed that the key first step in her industrialization plan is the need to restore trust in government noting that investors will come if there is strong, stable political and economic climate.
According to Robredo, government must earn the trust by professionalizing its bureaucracy and institutionalizing transparency and accountability. “Only then can we begin the work to unlock the energies of our economy,” she said adding that with an honest government at the hill, “the work ahead becomes easier.”
This can be done by strengthening the implementation of existing laws, like the Ease of Doing Business Act, and reviewing policies and legislation that have served as roadblocks for businesses to thrive.
She said investors will come if government policies are dependable, consistent and predictable. “Rules for success must not change in the middle of the game,” she said.
In addition, the lone woman contender in the upcoming presidential election, cited the importance of establishing incentives like lowering energy and transport costs.
Lastly, Robredo rallied the SEIPI members to contribute their inputs and expertise, and to further strengthen partnerships built over the years to push for the country’s industrialization.
The semiconductor and electronics industry is the country’s largest exporter, accounting for over 60 percent of the country’s total exports.
For this year, SEIPI has set a 10 percent growth target or $49.5 billion in exports from the estimated record exports of $45 billion in 2021 on robust global demand.
The SEIPI Board, which approved the target during their last Board meeting, has estimated that the industry’s exports reached $45 billion in 2021 or 3.87 percent higher than the pre-COVID 2019 performance of $43.32 billion.
“The Board of Trustees evaluated the condition of the semiconductors and electronics industry at our last board meeting and together made an overall growth forecast of 10 percent for 2022,” said SEIPI Chairman Glenn Everett at the SEIPI General Membership Meeting and Partner of the Industry Awards.
“SEIPI is generally optimistic about 2022 growth,” said Everett.
Everett, however, said that growth this year will all depend on the improvements to inbound and outbound logistics, health of the population, and the continuing opening of the country.
Based on his presentation, the global semiconductor sales performance at the end of 2021 showed a significant year over year growth between 19 to 28 percent. The Philippine industry is highly dependent on the demand in the global market.
“In all regions, quite a healthy outlook,” he said.
According to Everett, the industry has reached a new annual record for total semiconductor sales and units shipped as chip makers have substantially ramped up production to address the high demand as shown by high global purchasing manager indices.
For instance, he cited data from World Bank showing that global PMI hovered around 54 for most of last year. “The rise reflects new orders, but it also records a lengthening of vendor leap times and increased stock holdings,” he added.
He said the scenario looked better than it actually is adding that
PMI in the manufacturing sector bounced back in October reaching an all time high of 33.6, the fastest accelerated pace of improvement on record.
Driving the growth this year are the emerging technologies that offer remarkable set of opportunities for people in the electronics industry from innovations in automotive industry, cloud computing, interconnectivity, and smart devices.