Philippines eyes $100 billion electronics exports — industry chief Dan Lachica urges more reforms, cheaper power

Manila: It's possible to double Philippines' electronics exports to $100 billion, given the right conditions.

So said Danilo "Dan" C. Lachica, President of the Semiconductor and Electronics Industries in the Philippines Foundation, Inc. (SEIPI), the industry group is responsible for nearly $50 billion, or up to 60%, of total Philippine commodity exports (2025).

The industry employs about 3 million direct and indirect workers.

"There is a possibility to grow to $100 billion, if the investment environment is favourable," Dan Lachica told Gulf News in an exclusive interview.

Lachica, 72, has over 40 years of senior management experience in semiconductors, electronics and consumer goods manufacturing, 16 of which were in front-end semiconductor wafer manufacturing in Silicon Valley in California.

A Board Member of the Philippine Science High School, Dan also concurrently A Director & Managing Director-Electronics at First Philippine Electric Corp., Philippine Electric Corp., and First Philec, Inc. He sits as the President of First Philec Solar Corp., and First Philec Nexolon Corp.

Following is the recent Gulf News interview with Dan:

Gulf News: Electronics is one of the key pillars of Philippine manufacturing sector, with exports hitting nearly $50B in 2025. Is there room to grow, to say, double it to $100 billion, if not more? What would be the key drivers of that growth? 

Dan C. Lachica: There is definitely room to grow. We are projecting a 5% growth in 2026. There is a possibility to grow to $100 billion if the investment environment is favourable. 

Key drivers would include restoring investor confidence, ease of doing business (EODB), minimising corruption and political fiascos. Improved operating costs (power, logistics, labour), talent supply, supply chain availability are key drivers.

Gulf News: Given the industry challenges (high Philippine electricity rates, energy security issues, supply chain snags), do you consider these concerns as the high-priority items that need to be addressed ASAP, for the Philippine to ramp up investments in electronics manufacturing & better compete with neighbors equally keen to grab more foreign direct investments? Do you consider labor/manpower a key Philippine advantage? Do you see PAX Silica as an enabler of growth in the sector and beyond? 

Dan C. Lachica: While operating costs are major concerns, there are equally important considerations such as restoring investor confidence which was eroded by the precious administration’s erosion, including the sanctity of government contracts (PEZA incentive laws).

Manpower availability and productivity are still major advantages. However, the Commission on Higher Education (CHED) needs to improve on addressing the skills gap for university graduates.

Gulf News: Filipinos are also known as innovators, but industry support to bring those innovations to market is wanting. Do you see the lack of Venture Capital support for innovations as an area that must be developed further? I can think of one Pisay-related example: air-conditioner without refrigerant (AirDisc) invented by Ysa Palma, a Pisay alumna (Bicol regional campus) hasn’t hit the market, more than 5 years after it was patented/won awards. It was earlier reported she wanted $3m for her invention. Your thoughts... please.

Dan C. Lachica: The Department of Science and Technology (DOST) does a reasonably good job of developing new products and start-ups. However, R&D incentives and investor confidence need to be strengthened.

Gulf News: On the PAX Silica initiative: What do you consider as the ONE area that would enable it to deliver on its promise? Will it help drive advanced chips manufacturing, AI infrastructure, critical metals and minerals sectors (+ EV production)? What’s one upside of this initiative long-term – and potential downside (bureaucratic red tape?) that must be sorted on both policy and execution levels?

Dan C. Lachica: There is not ONE area. It’s all of the above, including bureaucracy/ ease-of-doing-business (EODB), Multinational Enterprise/Multinational Corporation confidence, inventives, reducing operating costs, strengthening  supply chain, ensuring skilled workforce, etc.

Gulf News: Major policy/legislative changes have taken place in recent years (Right of Way Law, PPP, Public Services, CREATE More Law), potentially allowing for more infrastructure investments, particularly in renewables. There's also a strong push for integrating nuclear power as a pragmatic path to ensure energy security in the Philippines. Do you believe the country should push nuclear power, is it doing enough in terms of harnessing nuclear energy? 

Dan C. Lachica: Small modular reactors (SMRs) and micro modular reactors (MMRs) should help reduce the power cost. Locating these modules next to the facility of a semiconductor operation, for example, would reduce transmission cost, distribution cost, wheeling charges and VAT.

Unfortunately, there are not many commercially-available modules in the Western market, except for those coming from China and Russia.

Another big problem is the corruption in government and the scandals in the (Philippine) Congress and the Senate.

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