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Philippine electronics manufacturers called on Friday for changes in the country's power tariffs and in wage laws to help its exports remain competitive as the peso strengthens.
The Semiconductor and Electronics Industries in the Philippines (SEIPI) has previously lowered its annual growth forecast for electronics and semiconductor exports this year to 5-8 percent from 10 percent due to the peso's rapid climb.
"The challenge for us here in the Philippines is to continue to remain competitive vis-a-vis a very strong peso, higher power rates and at the same time labour costs," Arthur Young, SEIPI chairman, told a news conference.
Electronics make up over 60 percent of total Philippine exports. Young said the industry should be given the flexibility to adjust salaries based on workers' productivity and not on the law. "If every year we allocate certain amounts for productivity improvements and every year we get a mandated wage increase, it wipes out our ability to give these productivity bonuses because we can only give so much every year," he said. The government should also allow automatic adjustments in power costs as the price of power changes so that companies can control their costs better, Young said. The peso has strengthened 11 percent against the dollar so far this year, the highest for any Asian currency after the Indian rupee.
The Southeast Asian country supplies about 10 percent of the world's semiconductor manufacturing services, including mobile phone chips and microprocessors. Texas Instruments and Intel Corp are two of the iggest companies with manufacturing plants in the country. Total registered investments in the electronics sector reached $1.12 billion in the nine months to September, beating the industry's target of $1 billion for the year.

Copyright Reuters, 2007

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