Joyce Pangco Pañares
Manila Standard

President Arroyo has vowed to prevent a wage spiral after a major export sector, the semi-conductor and electronics industry, warned of a flat growth for the rest of the year.

Speaking at the chief executive officers’ forum of the Semiconductor and Electronics Industries in the Philippines Inc., Mrs. Arroyo said her administration will do its best to hold off demands for wage increases by addressing the rise in food and fuel prices amid the credit crisis in the United States.

“We’ve been working hard to make sure food supplies remain stable and to put food on the table for every Filipino in order to avoid demands for a wage hike and therefore keep you competitive,” the President said.

SEIPI’s 242 member-companies produce two-thirds of the country’s exports, cornering 18 percent of the global electronics market. Philippine exports last year reached 431 billion.

Mrs. Arroyo downplayed the “conservative” projection of SEIPI of a flat growth for 2008, saying there is still room for the industry to grow given the interventions done by the government by spending more on agriculture and infrastructure projects.

Mrs. Arroyo noted that SEIPI booked a negative 22-percent growth rate when she first took over the presidency in 2001 but the industry managed to grow by 2 percent on a year-on-year basis since then.

“A continuation of these efforts will help us weather the global storm and make sure that we are able to achieve the economic rebound that we are projecting next year. You will recover even more now because we can see the investments now under gestation,” she said.

New investments that are expected to boost industry growth next year include the Texas Instruments’ project, which will come onstream in January with a $3 billion annual market.

Trade Secretary Peter Favila, for his part, said he is meeting officials of five top manufacturing firms from Taipei who have signified their intention to do business in the Philippines in December.

In his presentation, SEIPI chairman Arthur Young said the semiconductor industry is “still reeling from an eventful and turbulent first three quarters.”

“Early indicators do not show a health Christmas, the demand is slow and we expect a flat growth this year,” Young said, even as he added that the industry will be able to rebound by next year, with sales expected to reach a historic high.

While the US used to be its biggest market in 2001, the industry has managed to diversify, thus reducing its dependence on the US market which is beset by a financial crisis.

Sine 2006, China cornered the biggest chunk of Philippine semiconductor and electronics exports at 26 percent, followed by the European Union, Japan and the US.