The $120 billion-$130 billion export level targeted for 2022 could be achieved in five years yet as the pandemic had pushed back growth, according to Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. (PHILEXPORT).
The 2018-2022 Philippine Export Development Plan (PEDP) projected that the country’s exports to reach $122.3 billion - $130.8 billion level by 2022. The five-year plan also projected $102 billion-P105.8 billion in 2020 and $111.6 billion-$117.3 billion in 2021.
But Ortiz-Luis explained that the pandemic had tremendously set back the country’s exports growth. “Before the pandemic we’re already targeting close to $100 billon, but we only hit $87.8 billion last year, a three-year delay from target,” he said.
Exports in 2020 reached $80 billion only as against target of $111.6 billion - $117.3 billion in the PEDP. For this year, Ortiz-Luis said exports would likely reach $100 billion only.
As a result, he said, the $120 billion -$130 billion exports level could be achieved in five years yet. He said that the Export Development Council (EDC) is still finalizing the new PEDP exports projection.
The saving grace in the country’s exports performance is the electronics industry as it is expected to achieve its 10 percent growth this year on strong demand from the semiconductor side and inputs for digital products, particularly electric vehicles (EVs).
Ferdinand “Perry” A. Ferrer, EMS Group of Companies chairman and CEO, told reporters covering the press conference for the 48th Philippine Business Conference (PBC) where he is also the chairman, that global shortages of microchips are boosting growth for the domestic electronic companies in the country.
“I think we will achieve the 10 percent growth, the factories are full here in the Philippines. The other side on the electronics assembly depends a lot on the components that are brought in or produced. So the demand is there. If the components are available, we manufacture and assemble it. So we see again continued growth this year, and also for the year to come next year,” said Ferrer.
The Philippine electronics exports grew by 12.9 percent in 2021 and reached an all-time high of $45.92 billion. The 2021 export performance was even 6 percent higher than the pre-pandemic exports of $43.3 billion, thereby signaling a resurgence in the industry.
To show its bullishness, Ferrer said the 10 percent growth projection for the year already discounted the continuing global chain disruption that has been affecting the domestic industry.
For instance, he cited the strong demand for EVs where over 50 percent of content is already electronics. Even full-speed cars also have lots electronics components.
“So there is continued growth, you see EVs all over so hopefully we get the chance to build all these technologies in the Philippines,” he added.
“Even though we are growing, let us attract the new electronics. We have very good products now, but they will soon sunset,” he said.
With that, he said, the industry is working with government to attract investments on new technology products which will require competitive incentives.
He said the country can easily attract new electronics technologies because it has a very good base of semiconductor firms already operating here. But, he said, these firms need good incentives regime.
According to Ferrer, some electronics investments went to Vietnam and Malaysia instead of the Philippines because of incentives issue. “So, we working with government to rationalize the CREATE Law on how to further attract investments and the current administration is very open,” he said.