PH seeks expanded cooperation with Japan in the manufacturing of semiconductors

TOKYO, JAPAN — On February 9, 2023, Trade and Industry Secretary Fred Pascual joined President Ferdinand R. Marcos Jr. in a roundtable meeting with Japanese companies with export-oriented investments in the Philippines, particularly those in the Semiconductor, Electronics, and Wiring Harnesses industries.

The meeting was a crucial part of the Presidential Visit to affirm and strengthen the robust economic partnerships between the Philippines and Japan.

In his opening statement, Secretary Pascual said, “With the demand expected to grow in the global market, we would like to explore how we can encourage you to expand and upgrade your operations in the Philippines.”

The manufacturing of semiconductors, electronics, and wiring harnesses is considered as one of the top contributors to the country’s economic growth.

In 2021, the Philippines was the 4th largest exporter of wiring harness in the world after Mexico, China, & Romania. Global market share of wiring harness exports is 7% (USD2.3 billion annual sales).

Further, the Philippines is also one of the lowest cost producers of wiring harness in the world based on export value and quantity.

The Philippine electronics industry is classified into 73% Semiconductor Manufacturing Services (SMS) and 27% Electronics Manufacturing Services (EMS).

Most of the electronics businesses in the country operate in four key areas: Metro Manila, CALABARZON, Northern/Central Luzon and Cebu.

These companies practice the best known methods in manufacturing, with capabilities ranging from IC packaging, PCB Assembly and Full Product Assembly. The industry also employs over three million direct and indirect workers.

Asked about the importance of the Presidential Visit to Japan in an interview after the meeting, Secretary Pascual said that the meeting highlights our country’s commitment to economic partnership with Japan.

He added that 11 major Japanese companies attended the meeting and presented their current operations and future investment plans. The dialogue enabled the investors to air their concerns and the Philippine Cabinet members to explain what are being done to resolve these concerns.

Present during the roundtable meeting were companies namely, Brother Industries, Ltd., IBIDEN Co., Ltd., Murata Manufacturing Co., Ltd., Seiko Epson Corporation, NIDEC-SHIMPO Corporation, Japan Aviation Electronics Industry, TDK Corporation, Sumimoto Wiring Systems Ltd., Yazaki Corporation, Yokowo Co., Ltd., and Panasonic Corporation.

Meanwhile, Secretary Pascual was also asked to provide updates on the renewal of the United States Generalized System of Preference (US GSP), which recently expired.

The GSP is important to Japanese companies exporting to the US for duty-free entry of their export products from the Philippines. He noted that currently, the Philippine government is exerting all efforts to lobby with the US Government for the GSP reauthorization.