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Salceda wants semiconductor manufacturers to draw up plans to “seize opportunities, prepare for increased demand” as electronics manufacturing in China faces COVID-19 disruptions

April 25th, 2022

House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) wants the Semiconductor and Electronics industry of the Philippines to draw up contingencies and “ways to capitalize on supply disruptions elsewhere” as leading electronics manufacturers in China face shutdowns related to rising COVID-19 cases.

“For the past several months, places like China and Vietnam, which suffered far fewer COVID-19 cases during the time, were earning dollars instead of our companies because our own manufacturers faced shutdowns. Now that the situation is reversed, it is time for us to earn our own dollars from increased demand and constrained supply,” Salceda said.

“It’s a way to narrow our trade deficit also, which skyrocketed due to spiking demand from economic recovery,” Salceda adds.

The electronics and semiconductor industry is the largest export industry of the Philippines, accounting for some 2.8 billion U.S. dollars in export value.

Salceda made the suggestion in response to the halted operations of Apple Inc’s prime supplier Foxconn Technology Group at two of its factories in eastern China’s Kunshan after new COVID-19 cases were reported on site.

“We should also emphasize that a diversified value chain is always a good hedge against supply chain risks. So, it’s a good pitch for the Philippines, especially under the CREATE Law,” Salceda added.

Prepare for contingencies, prevent shutdowns

Salceda also asked electronics manufacturing companies to have contingencies “so that we do not have to halt production of electronics and semiconductors.”

“Prices of electronics and semiconductors are very likely to go up if the China shutdowns persist. It’s an earning opportunity for our export enterprises in that area. It would be a waste of opportunity if we also shut down.”

“So, I am asking the PEZA and the Semiconductors and Electronics Industry of the Philippines, Inc., to figure out how we can make sure that there are no shutdowns due to COVID, how we can use these global trends as an opportunity to market the Philippines as a more business-friendly destination, and how we can meet the increased demand for Philippine semicon products as a result of global supply issues,” Salceda added

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