2010 growth forecast for electronics upgraded

The electronics industry has revised upwards its 2010 export forecast, this time to growth levels that could more than make up for the plunge caused by the global downturn last year. From a 10-15 percent growth outlook, product sales could rise by more than a fifth based on a surge in orders recorded so far, Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) Chairman Arthur J. Young said last week. "The last time, we said it was 10-15 percent growth for 2010. Now we’re saying 15-20 percent and it could go higher than that," Young said in a telephone interview on Friday after the group’s board meeting for the quarter. "Personally, I think we can beat that [22.2 percent decline in 2009]… "These numbers are conservative. The inclination is to go higher," he added. The forecast means sales could top $27.1 billion this year, surpassing the level in 2007 before the global economy nosedived. The rosy outlook is in step with analysts’ predictions regarding global demand for electronic components. Information technology think tank Gartner predicts worldwide semiconductor revenue to grow by almost a fifth this year to $276 billion due to demand for personal computers and storage devices, public relations manager Sony Shetty said in an e-mail to BusinessWorld on Friday. For the Philippine industry, demand so far has been especially strong for components used in wireless devices and solar-powered gadgets, Young said. Buyers have mostly come from China, India, the Asia Pacific and South America, he added. But Young claimed the country’s power supply problems and murmurs of an increase in minimum wages this year could threaten the upbeat forecast. "We are very concerned about the lack of power and wage increases. We are concerned of this talk of minimum wage increases when companies are in rehiring mode... Can we afford to hire more now?" he said. University of the Philippines economist Benjamin E. Diokno took note of other threats as well. A rebound from the past years’ sales decline is "a bit too optimistic", he said in a text message on Friday. "With a weak and unsteady recovery [of the global economy] it is doubtful whether the demand for electronic products could be strong," Diokno said. "Also doubtful is whether the Philippines will be the electronics importers’ top choice for inputs given the existence of more competitive sources and the rising cost of Philippine exports as the peso continues to appreciate," he added. "Supply reliability [also] becomes a concern with intermittent power failures," Diokno said.