MANILA, Philippines — Despite limited direct exposure to escalating tensions in the Middle East, Philippine semiconductor exporters are wary of rising oil prices, which threaten to increase the operating costs of the energy-intensive chip industry.
Danilo Lachica, president of the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (SEIPI), said that while shipments to the Middle East remain “very minimal,” the sector is “at the edge of its seats” due to a potential global oil supply crunch. He emphasized that higher fuel costs would inevitably lead to increased expenses for transportation and electricity—key inputs for semiconductor production.
The industry showed remarkable resilience in 2025, with electronics exports reaching $49.64 billion, a 16.11-percent increase from the previous year. This performance exceeded forecasts despite global trade uncertainties and new U.S. tariffs, which largely spared the semiconductor sector. Lachica noted that local manufacturers primarily produce peripheral components and power devices, which were excluded from recent high-tech trade restrictions.
However, new headwinds have emerged beyond energy costs. A recent critical minerals agreement between the Philippines and Washington has unsettled some Chinese suppliers, leading to brief supply chain disruptions for essential materials like magnets.
Looking ahead, SEIPI maintains a “conservative” growth target of 5 percent for 2026. If met, this would push Philippine electronics shipments past the $50-billion mark for the first time. To support this growth, Trade Secretary Cristina Roque announced the “Ascend” program, a partnership with the Asian Development Bank aimed at transforming the region into a global hub for high-tech manufacturing.
