Japanese companies operating in countries in Asia and Oceania, including the Philippines, intend to expand their operations in the next two years, according to a survey conducted by the Japan External Trade Organization (Jetro).
The Jetro survey showed that 48.2 percent of the 115 Philippine-based Japanese firms polled intended to expand their operations this year and next. It also showed that half of the survey respondents planned to just maintain their current size while 1.8 percent might cut down their operations.
For the whole of Asia and Oceania, the survey showed that almost 58 percent of the 3,819 respondents had plans to expand in the next two years. This, however, was lower than the 63.6 percent (of 3,904 firms) registered in the previous survey, according to the Jetro report.
In Indonesia, 77.3 percent of Japanese firms surveyed expressed intention to expand, 21 percent would keep their operations as is, and 1.7 percent would be cutting down.
Japanese firms are also more keen on developing the markets in their host countries rather than developing new export markets.
“The immediate issues to tackle are product differentiation through quality or high value-added, and securing and training human resources,” the Jetro report said.
Among the challenges Japanese companies face in the region, the most serious one cited was the increasing wages of employees.
More than 80 percent of respondents in countries such as China, Indonesia, Vietnam and Myanmar cited the wage issue as their top concern.
Other issues that placed high in the list of the Japanese firms’ concerns, according to the survey, were the growing market shares of competitors, increase in procurement costs and “quality” of employees.
“The results show that management problems largely fall under increased costs and human resources,” the report said.
Jetro conducted the survey from October to November 2012. The survey covered the business operations of Japanese-affiliated firms in 20 countries and regions in Asia and Oceania: Northeast Asia (mainland China, Hong Kong, South Korea, Taiwan and Macau), the Association of Southeast Asian Nations (Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and Laos), Southwest Asia (Bangladesh, India, Pakistan and Sri Lanka) and Oceania (Australia and New Zealand).