American semiconductor companies operating in the country are clamoring for government incentives, infrastructure support, and skills training to keep their operations here instead of weighing the profitability of alternative locations in other countries.
The companies were part of a delegation organized by the Apl.de.Ap Foundation International (APLFI) who visited the Ionics factory in Laguna on December 13.
The foundation is the advocacy group of American rapper Apl.de.Ap.
High tech components made in the Philippines account for 76 percent of the country’s electronics exports in January to October, valued at $25 billion or nearly 76 percent of the $33 billion total shipments by the sector.
However, compared with $28 billion in shipments in the same period last year, the value of local components were down by as much as 11.32 percent.
Global players in the chips industry are looking for new sources of semiconductors due to steep increases in tariffs and production costs in other countries such as China, said Earl Qua, vice president of Ionics EMS Inc.
“The industry has seen great shifts in recent years, putting us in a prime position to be the leading exporter in Southeast Asia,” said Qua.
Global investors are turning to Southeast Asian countries to pick up the demand for semiconductors.
“They are now favoring Southeast Asia, and it’s important to
pounce at this opportunity before neighboring countries outperform us,” Qua noted.
Ionics EMS is a leading provider of electronics manufacturing services, based in the Philippines over the last 50 years.
Bing Viera, president of Amkor Technology Philippines, said his company plans to expand locally, but wants the government to deliver consistent policies that are essential in attracting investors.
Amkor is one of the world’s largest providers of outsourced semiconductor packaging, design, and test services.
“Without the government giving good investment incentives, investors will look elsewhere and the factories will be put in other countries,” Viera said.
“We want predictable and continuous government policies,” he added.
Charade Avondo, president of Xinyx Design Consultancy, is urging the government to support microelectronics engineers, through better education and faculty training.
Xinyx is a leading integrated circuit (IC) design company that is 100 percent Filipino-owned.
However, the Philippines has been losing good engineers to competitive markets, Avondo noted, claiming this development is an “alarming” situation.
“We lose so many good engineers to more competitive markets. The top tech companies in our neighboring countries have Filipinos as their head engineers. And while we are proud of them, we all want an environment that supports them enough to be able to stay and do their good work here,” Avondo said.
In recent years, students enrolling in electrical engineering have dropped significantly, despite the many potential benefits of becoming a part of this highly professional workforce, said a representative of the Technological University of the Philippines. He asked not be named.
Officials of APLF emphasized the importance of education and training in boosting the country’s manufacturing sector.
“The technology that we use in our everyday lives is often designed and built right here. It’s time we recognize our talent and invest in this industry for our nation’s future,” said APL.de.AP.
For over a decade, APLF has been working to help upskill Filipino talent and strengthen local enterprises.
“Our foundation seeks to ensure that the right investments are made in education and skills training so that this can translate into meaningful opportunities for Filipinos across industries all around the country,” said APLFI executive director Audie Vergara.
The foundation recently partnered with the Sisters of Mary Schools to come up with a song for the benefit of children in need, demonstrating an innovative approach to tackling social issues.
“We have always seen education and tech as the future. For better jobs and a better economy. It’s important to us that we shed light on this sector’s issues so that the government can work with us to build a strong workforce, and grow our existing facilities,” said Vergara.
In a separate Electronics Manufacturing Forum organized by the Board of Investments (BOI) on December 4, industry stakeholders and government agencies identified key products that could be included on the manufacturing sector’s priority list.
Stakeholders have identified opportunities for the manufacturing sector to focus on, noted Ma. Corazon Halili-Dichosa, BOI executive director.
These include electric vehicles, telecommunications and artificial intelligence, defense, and renewable energy.
Halili-Dichosa said the opportunities in these sectors are in line with global trends and domestic requirements.
The silicon chips industry remains a key sector in the manufacturing industry, and is a top contributor to the country’s merchandise exports.
“We would like to gather the views and plans of the local industry to take advantage of new legislations, making the current environment more conducive to growing the electronics manufacturing sector,” said Halili-Dichosa.
“Specifically, the New Government Procurement Act, signed in July 2024, enhanced the existing procurement systems and increased the local preference margin from 15% to 25 percent; while the Tatak Pinoy Act provides that for a period of 10 years, preference and priority shall be given to Philippine products and services and that said preference and priority shall be guaranteed on all levels of the procurement process, the BOI official noted.
“This 10-year waiver period of the Tatak Pinoy Act is, however, slowly chipping away, and thus, we need to work faster,” she added.
“These new legislations will benefit the industry if we get a plan in place as soon as possible. This is the very reason why we have this Forum, which is intended to come up with initial agreements on our candidate products and concrete next steps that we will need to follow-through starting early next year,” she said.
The Philippines is “open for business,” according to Dr. Dan Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc.
Now there are game-changing economic measures such as the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE), to enhance the perks, reduce corporate income tax and impose zero-rate against the value-added tax, he added.
