Electronics investments registered at the Philippine Economic Zone Authority (PEZA) reached P19.77 billion as of the first half of the year, establishing a foundation for future growth in exports.
But according to Dan Lachica, president of the Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI), the Philippines is missing out on investments due to regulatory constraints.
The group remains bearish as it forecasts a 10-percent decline in exports this year due to soft demand brought about by inventory correction and the product mix the country ships.
Based on the PEZA data, investments in computer, electronic and optical products amounted to P14.96 billion and in electrical equipment at P5.27 billion in the first six months of 2024.
SMS-EMS remains the strength of the local electronics industry.
SMS refers to the production of electronics devices’ semiconductors and components — from design to assembly. EMS involves the manufacture of electronics products for other companies on a contract basis, including circuit boards, electronics assemblies, and complete systems.
According to Lachica, the tax incentives rationalization of the Corporate Recovery and Tax Incentives for Rationalization for Enterprises (CREATE) has impeded investments to the country.
He said “there are couple of big ones (projects), but there could have been more.”
Lachica said Philippines lost a $1.3-billion investments from an American semiconductor firm because of the provisions of CREATE.
Lachica expressed hope the passage CREATE MORE (Maximize Opportunities for Reinvigorating the Economy) which would among others remove value-added tax on construction exports, restore the 5-percent tax on gross income earned tax and restoring autonomy of PEZA would encourage more investments in the sector.
