DEMAND from artificial intelligence (AI) and data centers has prompted the Philippine electronics industry to raise its 2026 growth forecast to as much as 10 percent, according to the Semiconductor and Electronics Industries in the Philippines Foundation Inc. (Seipi).
Seipi President Danilo Lachica said the industry initially expected flat growth this year after electronics exports grew faster than anticipated in 2025.
‘Initially, the projected growth was flat, but we raised it to 10 percent for 2026. As you know, we started in 2025; we grew by 16 percent. And we were conservative; we said it’s only 5 percent,’ Lachica told reporters after the Pax Silica briefing in New Clark City on Friday.
‘But looking at the performance of the other industries, we upped it to 10 percent,’ he added.
Electronics remained the country’s largest export category last year, generating $45.89 billion, equivalent to 54.3 percent of total exports, according to the Philippine Statistics Authority.
At a 10-percent growth rate, electronics exports could reach around $53 billion to $54 billion this year, Lachica said. The projected figure would exceed the sector’s previous export peak of about $49.6 billion in 2022.
‘$53 billion-$54 billion would be the highest. But it’s still far from Vietnam. They have more than $100 billion,’ Lachica said.
About 70 percent of Philippine electronics exports are semiconductor-related, he added.
Lachica said the expected growth is being supported by demand for equipment and components used in AI systems and data centers, although the country does not currently manufacture AI chips.
‘It was driven by AI. But, we don’t produce AI chips in the Philippines. However, the support equipment for AI, for data centers, for networking, switching networks, power control, of course, you need those to support your data centers and AI engines,’ he explained.
‘And of course, since AI is still going to grow, data centers are still going to grow, that’s why, automotive electronics, the other stuff, so we’re projecting that,’ he added.
For Lachica, it remains difficult to isolate the contribution of AI to overall electronics growth as demand is spread across several industries, including telecommunications and power.
For the first half of 2026, electronics and semiconductor exports have grown by more than 10 percent, the Seipi chief said, although he declined to give a more precise figure.
Meanwhile, the industry is seeking to increase the Philippines’s share of the global electronics manufacturing services (EMS) market, which Lachica estimated at about 1 percent.
The country accounted for around 5 percent of the global semiconductor market in 2025, but its EMS share remains much smaller, he said. ‘That’s why the industry roadmap is going to be instrumental in growing our EMS share in the global market beyond 1 percent,’ Lachica said.
On trade, Lachica said Hong Kong remains the Philippines’s biggest export market for electronics, followed by the United States, while China has slipped to third.
He noted that electronics shipments to Hong Kong are also re-exported to other markets, including the European Union, the US and China.
China, meanwhile, remains the Philippines’s largest source of electronics imports, prompting the industry to push for greater local sourcing of production inputs.
‘We have to strengthen our localization initiative to minimize the dependence. And guess what? What’s the biggest imported material? Wafers,’ Lachica said.
Despite the possibility of broader economic growth slowing, Lachica said AI-related demand has yet to reach a peak.
‘In any new technology, there will be a plateau over time. But I think the AI development is not even there yet. There are still growth opportunities and advancements in technology. The peak is not there yet,’ he said.