High power costs drain PHL of potential investments in electronics industry

Semiconductor and Electronics Industries in the Philippines Inc. (SEIPI) chairman Dan Lachica said at a Friday press conference that the Philippines is losing out opportunities to neighbors such as Malaysia, Thailand and Vietnam, where investors find power rates less expensive. Industrial power rates in the country are second highest in Asia, next to that of Japan and Singapore. Lachica said a US firm that manufactures photo-voltaic cells and solar panels is currently looking for sites to set up four new factories in Asia and pour in a millions of dollars in investment, but complained that the cost of power in the Philippines is too high. “There would be more investors if we can figure out a solution to high power cost," he said. He said semiconductor and electronics exporters’ power expenses amount millions of dollars, even if these take up only 5 percent of total costs. Lachica said the quality of the Filipino workforce, especially of engineers, is compensating for the uncompetitive power costs. SEIPI president Ernesto Santiago said several semiconductor and electronics firms are expanding operations within the year, such as Texas Instruments’ planned further expansion at the Clark Freeport Zone. Moreover, Lachica, who also serves as president and chief executive officer of the Lopez Group-led First Philec Solar Corp., disclosed that Philsec is entering into a joint venture with Nexolon of South Korea. The joint venture called First Philec Nexolon Corp. is meant to supply the South Korean principal through a $100-million facility near First Philec’s Batangas plant. Six hundred people would be hired for this project, Lachica said. Almost $2.3-billion worth of investments were infused into the semiconductor and electronics industry last year — the highest ever and a fourfold improvement from 2009’s $480 million worth of pledges. Under SEIPI’s 2011-2016 roadmap, the industry targets to secure $2-billion worth of investments annually starting this year. Semiconductor and electronics account for about two-thirds of the country’s merchandise exports. – MRT/KBK, GMA News