THE recently signed free trade agreement (FTA) with South Korea will help the Philippine electronics industry maintain its market share in South Korea, the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI) said.
“If anything, (the FTA will help us) maintain our share of the market. Obviously if we didn’t have that, it would go down,” SEIPI President Danilo C. Lachica, told reporters on the sidelines of the 21st MAP International CEO Conference last week.
Mr. Lachica said that the FTA will help address the overall cost of doing business, which is a global concern.
“Korea is within our list of top five (markets). FTAs will always help but with the nature of the electronics industries being located in export zones, there are not so many taxes imposed on us,” he said.
“But the overall cost of doing business is a global concern; that is why FTAs are always helpful, otherwise, we are at a disadvantage,” he added.
Mr. Lachica said the absence of an FTA will put the Philippines at a disadvantage with other countries that have trade deals with South Korea.
The electronics industry imports around 7% to 8% of its materials from South Korea, and exports to that country account for 5% to 6%, according to Mr. Lachica.
The FTA was signed on the sidelines of the 43rd ASEAN Summit in Jakarta on Sept. 7. It made the Philippines the fifth ASEAN member to sign an FTA with South Korea, after Singapore, Vietnam, Cambodia and Indonesia.
Under the FTA, tariffs will be eliminated on 1,531 lines of Philippine agricultural goods, of which 1,417 lines will be removed upon entry into force (EIF) of the bilateral FTA.
The FTA also eliminated tariffs on 9,909 lines of industrial goods, of which 9,747 lines are set for tariff elimination upon EIF. — Justine Irish D. Tabile