Intel will close Cavite Plant in the Philippines

Intel is a pioneer investor to the semiconductor technology industry in the Philippines. It has been in the Philippines for more than a decade and has been providing jobs for the country’s Electronics engineering graduates for quite a while.

I was really surprised about Intel’s decision to close down it’s plant in Cavite. In Intel’s announcement, It said that it will be closing down a couple of test facilities in Malaysia in addition to the facility in Cavite in order to restructure some of its manufacturing operations and align its manufacturing capacity to current market conditions. This really sends an alarming situation of the global economy. Even Microsoft is having its first significant layoffs during it’s 34 year of existence.

It will surely impact a lot in terms of jobs and the semiconductor export figures. A recent estimate put Intel’s total investments at US $1.5 billion. According to a 2004 study made by University of Asia and the Pacific, Intel’s impact to the Philippine economy can be summarized below:

• As a contributor to the national economy:
  • USD 383 million in total output effect is equivalent to 0.30 percent of Philippine GDP
  • USD 7.2 million of total tax contributions in 2003, equivalent to .01% of current GDP
  • USD 301 million in direct exports in 2004
  • USD 713 million in direct and indirect export contributions
  • USD 37.5 million employment income
    • More than 5000 direct employees
    • Generates 36,000 jobs indirectly, in allied services/industries
• As a driver of Cavite’s economy:
  • Accounts for 22 percent of exports
  • Accounts for 36 percent of real domestic production
  • Accounts for 15 percent of all ecozone employment
  • Intel Technology Philippines is the largest employer in General Trias
• Taxes:
  • 2005 – USD 5.1 m
  • 2004 – USD 8.7 m
  • 2004 – USD 7.2 m
• Stimulant of local business growth:
  • USD 25 million to local services in 2003
  • From 127 SMEs in 1996, to 447 in 2004
  • From 4 real estate developments in 1996 to 30 in 2004

From the figures, it will surely not only impact the employees to be layed off at the Intel plant in Cavite, Philippines but also a good number of other technology related services.

I just hope that the local and global economy will start the upturn and we would see Intel back in our country to continue providing more jobs for our people in the Philippines.