PH Semiconductor Industry Moves to Boost Competitiveness Amid Global Trade Risks

The Philippine government is ramping up efforts to strengthen its semiconductor and electronics industry—a key export sector that directly and indirectly supports millions of Filipino workers—even as global trade shifts and tariff wars threaten its stability.

In a significant move, President Ferdinand Marcos Jr. signed Administrative Order No. 31, establishing the Semiconductor and Electronics Industry (SEI) Advisory Council. The council is tasked with guiding the creation and implementation of the Philippine Semiconductor and Electronics Industry (PSEI) Roadmap, which aims to solidify the country’s foothold in global supply chains and enhance its competitiveness in advanced manufacturing.

The SEI Advisory Council includes representatives from key government agencies, private industry, and education and training institutions. It will focus on expanding research and development (R&D), accelerating technical education, and generating higher-quality jobs—particularly in areas such as AI, chip design, and next-generation manufacturing.

However, this roadmap is being launched under growing external pressure. The recent end of the U.S. 90-day tariff suspension on Philippine goods on July 8 has raised alarms in the trade-dependent industry. Former U.S. President Donald Trump reimposed tariffs on key imports—including semiconductors and electronics—applying a 20% duty on Philippine goods, higher than the initially announced 17%.

Despite these developments, Frederick Go, Special Assistant to the President for Investment and Economic Affairs, assured the public that a significant portion of semiconductor and electronics exports remains exempt from the reciprocal tariffs.

The United States remains a key trade partner, accounting for roughly 20% of the Philippines’ total exports, making the country particularly vulnerable to shifts in American protectionist policy. At the same time, the Philippines holds around 5% of the global semiconductor packaging market and continues to be Southeast Asia’s leading electronics exporter.

At a recent policy forum hosted by the Philippine Institute for Development Studies (PIDS) and the Bangko Sentral ng Pilipinas (BSP), experts warned that the electronics manufacturing labor force—including thousands of workers in Cavite, Laguna, Batangas, and other export zones—could face job insecurity if production slows or relocates due to tariff and trade pressures.

Rodrigo Balbontin of the Information Technology and Innovation Foundation (ITIF) urged the Philippines to proactively engage in trade negotiations, strengthen intellectual property protections, and build industrial resilience to protect domestic employment.

Amid these policy shifts, a deeper concern is emerging: at what cost is “competitiveness” being pursued? According to the IBON Foundation, while the government promotes investor confidence and reduced operational costs to attract global players, Filipino workers often bear the brunt—through stagnant or declining wages, precarious working conditions, and mounting productivity demands.

The number of poorly paid Filipino workers increased by over 2 million between 2022 and 2023, signaling a troubling trend of wage suppression even in high-growth sectors like electronics.

As other countries adopt protectionist measures to shield domestic industries, the Philippines is doubling down on trade liberalization and cost-reduction strategies, opening its economy to more foreign investment. The country is positioning itself to expand semiconductor capabilities and reinforce its role in global value chains through strategic planning and policy coordination.

But without meaningful labor safeguards, the promise of industry growth may come at the expense of the very workers who power it.

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