Semicon firm says PH business climate hurting chip industry

Insider Spotlight

• Political uncertainty, regulatory hurdles and infrastructure gaps are making the Philippines less competitive for semiconductor investments even as the government promotes Pax Silica.
• Despite the difficult environment, Cirtek  says it is strengthening its balance sheet after the sale of Quintel, debt reduction and operational discipline.
• The disclosure underscores that improving the business climate may be just as important as attracting new AI and semiconductor investments.

A listed semiconductor company says the Philippines’ business climate is making it harder for the local industry to compete with regional peers, even as the government pushes the US-led Pax Silica initiative to lure new tech investments.

“The semiconductor market in the Philippines has become increasingly difficult compared to other Asian countries,” the Liu family’s Cirtek Holdings Philippines said in a regulatory filing on Thursday.  

“The broader business climate has been weakened by political maneuvering, impeachment proceedings, and persistent reports of corruption, which have eroded customer confidence and created uncertainty,” it added. 

Cirtek made the comments in response to a Philippine Stock Exchange inquiry on the status of dividend payments on its preferred shares, which have remained suspended since March 2025.

Jerry Liu 

Cirtek Holdings chair

Direct impact to business 

“This environment has directly affected commercial performance, with customers delaying commitments, postponing investments, and reducing overall demand,” Cirtek said. 

“Additionally, the Philippines continues to struggle in attracting foreign direct investment (FDI) due to regulatory restrictions, tax and compliance complexity, infrastructure and logistics weaknesses, as well as policy and governance risks,” the company added. 

Cirtek operates a semiconductor assembly and test facility at the Laguna Technopark in Biñan, Laguna.

Recovery plan

Despite those challenges, Cirtek said it remains committed to protecting shareholder value by exploring strategic partnerships, reinforcing operational discipline and safeguarding margins by retaining its existing customer base.

The company said the sale of US-based Quintel in June was a “decisive and value-preserving move” that improved liquidity, reduced debt and eliminated recurring operating losses, even as it lowered consolidated revenue by removing the unit’s contribution.  

Net proceeds from the divestment will primarily be used to partially settle debt, with the balance allocated to working capital to support ongoing operations, it said. 

The company said no allocation has been made for dividend arrears on its preferred shares, with any resumption dependent on restoring positive operating cash flow and generating sufficient unrestricted retained earnings.

 —Edited by Miguel R. Camus