The semiconductor and electronics sector will continue to drive exports as it shows signs of recovery towards a steady 7 percent growth this year.
This as Senate assured the final version of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill — expected to be passed by both chambers in two weeks — is aimed at ensuring investors in the industry will stay.
Charito Plaza, director-general of the Philippine Economic Zone Authority (PEZA) in her speech at the general membership meeting (GMM) of the Semiconductor and Electronics Industries in the Philippines n Inc. (SEIPI) on Friday said the sector contributed about 35 percent of total investments registered in the agency in 2020, equivalent to about P37 billion
Plaza noted from 2006 to September 2020, investments in the semiconductor and electronics industry in PEZA amounted to P627.8 billion and ended last year with 368,478 in direct employment.
“The export revenues the country derives from your operation in PEZA have kept out economy strong despite the current challenges we’re facing,” Plaza said.
SEIPI in a statement said in December 2020, exports in the electronics industry reached $3.9 billion, an increase of 2.4 percent from November. Last year, total exports amounted to $39.67 billion or 62.3 percent of total Philippine exports.
“The increase in exports is caused by the slow but steady economic recovery from the initial impact of the pandemic, which bodes well for the semiconductor and electronics industry that has a projected growth of 7 percent for 2021,” said Dan Lachica, SEIPI president.
But SEIPI noted changes in the implementation of the community quarantines, the outcome of the rationalization of incentives in the CREATE bill, and the overall global pandemic and economic situation can still affect the growth of the industry.
Upon the passage of the CREATE Bill in the Senate, SEIPI raised concerns on the cap of P1 billion in investments for PEZA approval.
Sen. Ralph Recto at the GMM assured both chambers are expected to pass CREATE in the next two weeks.
“We are on the last mile. While we did not fully get what we wanted…the Senate version is better than the original… (and the) version approved by the House,” said Recto.
Recto in his remarks also cited the contribution of the electronics industry which he said accounts for $2 in every $3 worth of Philippine exports annually.
“That’s a little more than P2 trillion in 2019. You’re brought into the country P1.1 trillion worth of investments, not paper, not portfolio, not portable, but fixed assets like factories,” Recto said.
He added: “If these are your robust contributions, then laws that affect you should not end up as epitaphs of your demise for the reasons for your migration. On the contrary, they should be the first for you to stay longer, to expand aggressively and to invest more I agree that calibrations are in order. Even laws are subject to obsolescence, a 2.0 version of the investments rules must be written, some of which may hurt, but overall, they must help.”
Meanwhile, PEZA reported 86 percent of all registered companies are now operational — 84 percent for information technology-business process management and 88 percent in manufacturing are operational as of January.