MANILA, Oct 3 (Reuters) Philippine electronics and semiconductor exports are likely to grow up to 8 percent this year from 2006, slightly lower than earlier estimates due to a stronger peso, an industry official said on Wednesday.
Exports of electronics, largely assembled from imported parts and which account for close to two-thirds of the Southeast Asian nation's total shipments, grew 8.4 percent in 2006 to $29.6 billion.
''Our original projection for 2007 of 5 to 10 percent (growth) is too wide a range but it has become clearer now that 5 to 8 percent is more realistic,'' said Ernesto Santiago, executive director of the Semiconductor and Electronics Industries of the Philippines Inc.
''We hope to get an additional $2 billion in exports this year as the market is growing and demand is there especially for consumer, automotive and wireless application,'' Santiago said.
Santiago said investments in the Philippine electronic industry are expected to exceed $1 billion this year, a seven-year high.
Investments in the first half already amounted to $680 million.
A strong peso has hurt the local export sector, with the electronics sector further dampened by depressed global prices. The peso is Southeast Asia's best performing currency so far this year, with a gain of nearly 9 percent against the U.S. dollar.
''The volume is there, the market is there,'' Arthur Tan, former president of the industry group, told reporters separately regarding export demand.
''It's just that right now because of the weak dollar and our strong currencies regionally, not just the Philippines...that's causing this deflationary stance (on prices),'' Tan said.
''If it continues, the trend, this is going to be painful for us,'' he said, referring to the strengthening of the peso.
The peso closed at 45.14 per dollar on Wednesday, weaker than the previous day's 44.915.
The Philippines supplies about 10 percent of the world's semiconductor manufacturing services, including mobile phone chips and micro processors.
Strong global demand for electronics has boosted sales for the likes of Texas Instruments , which has one plant in the Philippines and is building a second. TI makes mobile phone chips for Nokia ..
The government expects total merchandise exports to grow 11 percent this year after a 14.6 percent climb in 2006.
But the central bank said export growth this year would probably be at a slower pace of 8 percent.
REUTERS SR RS1929