MANILA – The Philippine electronics industry will shrink at a slower pace this year than initially forecast as the country eases COVID-19 quarantine measures, an industry group said Friday.
Glenn Everett, chairman of the Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI), said they are now expecting the local electronics industry to contract by 5 percent in 2020, which is less than their earlier forecast of a 10 percent to 15 percent slump.
"We're seeing strong improvement in semicon and certain sectors like industrial, medical and other related sectors. But it's not enough to offset the losses of the year which have a strong negative effect."
With the country relaxing quarantine measures, Everett said "firms remain optimistic that production will improve, but this remains to be seen on what effect the different risks will have."
Everett emphasized the local industry has also begun shifting to newer technologies.
These include technology-assisted assembly lines and the use of ultra-fast 3D printing technologies, to make sure manufacturing processes remain efficient while following health protocols.
A key concern for the industry meanwhile is the possible removal or shortening of tax perks with proposed corporate income tax reforms.
Under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) bill, corporate income taxes will be reduced to 20 percent from the current 20 percent, but tax incentives to certain industries will have to be "rationalized" to make up for the revenue shortfall.
SEIPI has said that removing fiscal incentives would deter new investments in the country or even push current investors to leave.
The Department of Finance meanwhile has argued that the proposed measure, "will allow the government to offer superior incentives that are performance-based, strategically targeted, time-bound, and fully transparent."