17 Sep SEIPI on US-China trade war
ELECTRONICS exporters are expecting only some negative effects from the US-China trade war, which has had very little impact on the industry so far, with most firms more concerned about the damage done by the pandemic.
Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) President Danilo C. Lachica said he is counting on the trade war not being as damaging as the pandemic.
“There may be some backlash but hopefully not as drastic as COVID impact,” he said in a mobile message Wednesday.
The US has prohibited US companies from dealing with Chinese company Huawei Technologies Co. Ltd. and is considering adding China’s largest semiconductor manufacturer to its trade blacklist. In response, China is developing a domestic semiconductor industry.
The US and China are two of the Philippine electronics industry’s top three export destinations.
“The trade tensions have been going on for some time but we have not seen a significant impact on our industry, certainly nothing like the impact of COVID-19. We supply the global market so we cater to global demand,” he said.
The US-China trade dispute that started in 2018 saw hundreds of billions of dollars worth of tariffs imposed by the two economies.
Mr. Lachica last year said that electronic manufacturers fleeing China have been moving to Vietnam — not to the Philippines — due to lower operating and labor costs there.
Electronics shipments, which account for more than half of Philippine merchandise exports, declined this year after lockdown restrictions disrupted operations.
Electronics exports fell 10.4% to $3.18 billion in June, which nonetheless represented a recovery from the $2.29 billion posted in May.
While the business group had earlier predicted a 20% decline for 2020, revising its earlier 5% growth projection issued before the pandemic, Mr. Lachica said there is cause for optimism.
“We are now at about minus 14%. I hope the improvement continues,” he said.
Philippine exports could return to growth in 2022 with a flat performance next year, the Trade department’s export marketing arm said.
But an export business group said that growth could come as soon as next year, especially if electronics and mining demand returns. — Jenina P. Ibanez