MANILA – Philippine electronics exporters are wary of a possible trade war between the United States and China, the chair of the Semiconductors and Electronics Industries of the Philippines (SEIPI) said on Monday.
Many of the Philippines' electronics companies which export to both the US and China will be affected if the two countries impose tariffs on a host of goods, said SEIPI chair and ST Microelectronics Philippines general manager Virginia Melba Cuyahon.
"That means the revenues will surely go down," Cuyahon said in an interview with ANC's Market Edge.
The White House said last week that US President Donald Trump had made up his mind to impose 25 percent tariffs on $50 billion worth of Chinese goods. China meanwhile has said that it was ready to impose its own retaliatory tariffs on US goods.
Cuyahon said they are also concerned about the second package of the Tax Reform for Acceleration and Inclusion (TRAIN) being pushed by the government.
"We support the government project on infrastructure development because we will also benefit from it, but there are certain provisions in the TRAIN 2 law that has (sic) to be clarified very well," she said.
The second package aims to lower corporate income taxes to 25 percent from 30 percent, and "modernize" fiscal incentives.
Among the proposals is to replace the present 5 percent tax on gross income earned with a preferential corporate income tax rate of 15 percent based on net income.
Cuyahon said SEIPI has held dialogues with the government, including Finance Secretary Carlos Dominguez on the position of the electronics industry.
She said SEIPI is amenable to the 15 percent income tax "provided all the other taxes are already incorporated there" including taxes from local government units.
Electronics manufacturers meanwhile are not too concerned about the devaluation of the peso, Cuyahon said, as most of them are already "dollar-based."
Despite uncertainties about tariffs in China and the US, Cuyahon said the industry and her firm ST Microelectronics remain optimistic about their growth prospects.
She said emerging technologies like smart driving, the internet of things and smart cities will be drivers of growth.
Cuyahon said they currently have 2500 personnel, and expect to add 3 percent more staff this year and 5 percent next year.