Industry officials projected electronics exports to grow by 10 percent to 26.68 billion dollars, a percentage point less than its 2002 result, before shipments pick up by 20 percent next year to 32.02 billion dollars.

Electronics products account for 69 percent of Manila's merchandise exports and about 24.15 percent of the gross national product, official figures show.

"We're considering this year as a mild year," with "no major investments" and "no major hirings", said Ernie Santiago, executive director of the 202-member Semiconductor and Electronics Industries of the Philippines Inc. (SEIPI).

He told an industry briefing that electronics sector investment in the Philippines would be flat at about one billion dollars annually over the next two years.

"I don't think the length of the conflict" will be a factor "as long as it is confined in that area and it will not create problems like terrorism," said Norberto Viera, president and managing director of the Philippine unit of US firm Texas Instruments.

"If they don't start bombing in other places or impede the movement of goods I think we would be okay."

"I think we'll still be able to see between 11 and 15 percent (export growth) barring any major incident," he added.

"We are very bullish of the industry primarily because of the success of the wireless gadgets," said Viera, whose company provides at least 95 percent of all the digital signal processors or brains of mobile telephone maker Nokia.

"As a matter of fact the demand for these products is so hot that in our factory back in Baguio (city) we are running at full capacity," Viera said.

Nokia of Finland has a 35 percent share of the mobile phone handset business.

Viera said Texas Instrument Philippines' turnover this year should rise to between 2.3 and 2.5 billion dollars compared with 2.2 billion dollars last year. The amount is equivalent to the total shipments of the garments industry, the Philippines' number-two export product.

A spokesman for Integrated Microelectronics Inc., a major Filipino-owned electronics manufacturing subcontractor, said its revenues should rise by between 8.0 and 10 percent this year, from 82 million dollars in 2002.

Santiago said the Filipino electronics sector was initially looking at a burst of global technology spending in 2003 to provide a complete recovery from a minus 20 percent export plunge in 2001.

"But because of some uncertainties, the Iraq war, it was delayed and we're looking at next year," he said.

SPACE.WIRE