THE Indo-Pacific Economic Framework for Prosperity (IPEF) is expected to boost US investments in the Philippine semiconductor and electronics industries, according to the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI).
“The IPEF will allow for the expansion and diversification of US foreign direct investment (FDI) in the Association of Southeast Asian Nations (ASEAN) region. We need a lot of that especially in the semiconductor and electronics space,” SEIPI President Danilo C. Lachica said in a forum organized by the American Chamber of Commerce of the Philippines in Makati City on Feb. 9.
He added that the IPEF will help build resilient supply chains through the creation of an intergovernmental crisis response mechanism, improve labor standards, and promote climate resiliency and the use of renewable energy.
The IPEF, launched by US President Joseph R. Biden, Jr. in May, aims to increase the economic engagement of the US in the Indo-Pacific region.
Parties to the IPEF include Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, the US, and Vietnam.
According to Mr. Lachica, called for a review of the incentives system as defined by Republic Act No. 11534 or the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.
“This CREATE incentives rationalization is a big threat to the industry after the transition period. Without new products, you’re going to be stuck with legacy parts and after the nine years and when these parts become obsolete, guess what’s going to happen to the industry and the current employment we’re generating? It’s not going to be the same,” Mr. Lachica said.
“Hopefully, this new administration will review the incentives rationalization and correct this problem,” he added.
Supply Chain Management Association of the Philippines Executive Director Corazon Curay said the IPEF gives the Philippines wider access to global markets and ensures a resilient supply chain.
“The IPEF… also allows us to pursue goals of fully digitalized businesses, environmentally sustainable value chains, and resilient logistics networks expanding with our trading partners in Asia-Pacific and around the world,” Ms. Curay said.
“This provides Philippine enterprises with a running start as they pursue expansion plans, allowing them to provide more value to their customers, partners, shareholders and stakeholders and the wider economy,” she added.
SEIPI listed the top three destinations of Philippine electronics exports among IPEF member countries in 2022 as the US with $6.52 billion, Singapore $4.19 billion, and Japan $3.63 billion.
The top three products exported by the Philippines to IPEF member countries in 2022 were semiconductor components and devices at $14.08 billion, electronic data processing products $3.63 billion, and telecommunications products $780.37 million.
SEIPI has set a target of 9% growth for electronics exports this year, against the 10% growth target in 2022.
The Philippine Statistics Authority estimates that electronic product exports rose 7.2% to $45.58 billion in 2022. — Revin Mikhael D. Ochave