PH to reel in $20B in foreign investments from Japan, says economic analyst

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Albay Gov. Joey Salceda, an economist, said that Japan’s fear of China’s increasing military and financial might would likely trigger the second massive outflow of Japanese direct investments. INQUIRER FILE PHOTO

MANILA, Philippines—The Philippines is well poised to profit from Japan Prime Minister Shinzo Abe’s move to steer clear of China and move to Southeast Asia for capital expansion.

 

Trade and Industry Secretary Gregory L. Domingo told the Philippine Daily Inquirer: “I agree we will benefit, we are already seeing some of it now.”

 

Japan is the country’s biggest business partner with  total trade and investments of $13 billion and the third biggest source of tourists.

 

Albay Gov. Joey Salceda, an economist, said that Japan’s fear of China’s increasing military and financial might would likely  trigger the second massive outflow of Japanese direct investments.

 

Salceda noted a repeat of the effect of the 1987 Plaza Accord where the United States, France, West Germany, United Kingdom and Japan agreed to force the appreciation of the yen from 248 to 78 per US dollar to help the American economy recover.

 

“The Philippines was not able to optimize the benefits due to coup-driven political instability post-EDSA and aggressive competitive marketing by Malaysia, Thailand and Indonesia. We cannot afford to lose out again on this FDI (foreign direct investment) bonanza which I consider to be the single most important economic factor in the Philippine horizon,” said Salceda.

 

Salceda said that if the Philippines played its cards right, it could haul in at least $20 billion in Japanese investments in manufacturing over the next six years.

 

“I started to be an analyst during 1989, one year after the Plaza Accord. I remember quite distinctly that this was the number the analysts community were projecting,” said Salceda.

 

“This is the most benevolent economic and external discrete factor ever to happen in favor of the Philippines, only the Asian pivot of the US geopolitics comes second,” said Salceda.

 

Salceda suggested that given this massive opportunity, the Aquino administration should push for “more articulate ambition in infrastructure and more aggressive visioneering and faster execution.”

 

Another major concern of Japanese investors is the high cost of electricity in the country.

 

“Since power rates are even higher here than Japan’s — making us the highest in the world — so definitely it must be lower than Japan but the comparison should be with our competitors (not with China) like Malaysia, Thailand and Indonesia on the first tier and on the second tier – Vietnam and on the 3rd tier — Myanmar, Laos PDR and Kampuchea. On my many trips to Japan for our JICA project, I think we would have a normalized market share at P7.50 per kilowatt hour,” said Salceda.

 

 

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  • GustoKoHappyKa

    kahit sinong investor napapa kamot nalang talaga sa sobrang mahal ng kuryete dito sa atin.. sa company namin mahina 1million kada buwanan bayad sa kuryente

    • OFW28

      Baka hula mo lang yan! hehhehe joke!

      ok lang na mahal basta kumikita ang company mo at magka bunos ka pa!

  • GlenMJacob

    Hello Gov. Salceda, how are the geothermals in Albay ? This is an asset for Albay what do you think ?

    • Karabkatab

      Ironically, if you are resource rich, the place will not benefit much from it,  Why, because as defined in the constitution, all natural resources, beneath and above the surface, belong to the state (or the central government).  

    • http://pulse.yahoo.com/_EAUFRN6E4JJ67TDR25KRGR3DFE Zen

      the geothermal produces raw energy that is diverted to manila for processing so we can use that energy. sadly, when it goes back to albay in the form of usable energy it is more expensive than in manila. 

  • calipso_2100

    Ngumingiti na ang mga kurap. Nag iisip na kung paano magkaroon ng “share” sa mga investments.

  • http://pulse.yahoo.com/_EDXEVEFHW2ZT5VWHDWBNM6XGE4 RyanE

    Japan have been expanding its car industry in Indonesia. Most branded electronics gadgets that I recently bought are made in Malaysia and Vietnam. There are lots of free zones in Indonesia where big companies have put up fabrication yards for oil and gas facilities. 

    The PHL is actually being left behind despite our abundant skilled manpower. Perhaps it’s because of the high cost of power, too much red tape, graft and corruption. The 60-40 sharing could be also one of the reasons why PHL managed to catch only a few of foreign investments pouring in Southeast Asia.

    • http://profile.yahoo.com/LFJSUXBKLUUB6EJRJVNIUXLECM Deh

      Bingo! Hence we will missed out again to a large investment not only from Japan but other countries who wants to invest here but can’t for the reasons you have mentioned.   

    • foreignerph

      You’ve nailed the 3 factors but I think the corruption perception index is the worst. I heard from one CEO that had a dredging contract in Laguna (he was the lowest bidder) that he just had to give up because his price estimate for the job was eroded by the bribes he had to give in cash to all kinds of politicians and mysterious “agencies”.

      Industrial countries have their corruption very well under control and all invoices in the industry are paid by bank transfers that leave clear traces. The guy I mentioned was utterly shocked he had to pay these extra “fees” (not mentioned in the contract) in cash, especially since cash payments over 100,000 euro are considered money laundering by default.

    • http://pulse.yahoo.com/_D3LDMMAKC6UDQLDVFP2DGSJBXY Jezzrel

      di lang sa 60-40 issue, isama mo na ang issue sa koryente, corruption, red tape, criminality at saka mga pesteng labor union na iyan kaya wala nag iinvest sa atin lalo na sa manufacturing….

  • carlorocci

    Dapat talagang mapababa ang presyo ng bayarin sa kuryente, dahil hindi lang negosyo ang makikinabang kundi pati na ang ordinaryong Pilipino… 

    Chaka ang beauty ni Gob sa pektuyur….Mag-foundation ka nga Gob..kitang-kita ang iyon mga holes….hehehehehe……

    • http://pulse.yahoo.com/_D3LDMMAKC6UDQLDVFP2DGSJBXY Jezzrel

      he he he, mapapababa mo ba ang koryente ng meralco? kaya nga hate nila si marcos noon araw eh… mababawasan kita ng mga oligarch, me share pa naman ang nakaupo sa tabi ng ilog pasig…

  • Jhun Santos

    i can see this coming, i hope to see the day that Japan would divert their investment on PH, ika nga nung famous saying “the enemy of your enemy is your friend”

  • KpTUL

    Salceda ? was this the same governor thought that the international community should give more mendicant countries like the Ph  ? The Japanese should be wary of their money … This governor is one hell of a ….

    • 12JEM

       This governor is the best governor in the Philippines. Lucky Albay ! ! !

      • efriend

        agree

      • http://pulse.yahoo.com/_D3LDMMAKC6UDQLDVFP2DGSJBXY Jezzrel

        Better than BBM during his stint as governor of Ilokos Norte? Good & lucky albay indeed… how about comparing to the current governor of Ilocos Norte?

    • tagatabas

       You are out of line, need to increase your IQ by eating fruits and veggies. You dont know what your talking about. Just sleep and have a good rest.

    • http://pulse.yahoo.com/_EAUFRN6E4JJ67TDR25KRGR3DFE Zen

      Kptul we hope we have less pinoys like you with small IQ. Research ka muna kesyo nagpadala ka sa isang article na di mo naman nainitindihan. 

  • akramgolteb

    Tongpats ang kalaban ng Japan dito kaya sa iba na lang sila pupunta.

    • tagatabas

       A destroyer, nega thinker, paranoid.

    • elephant_walk

       kahit saan man sila magpunta meron nyan.  ang advantage ng pilipinas ay highly skilled manpower while sa  ibang SEA countries ang infrastructure and incentives for foreign investments. 

    • OFW28

      angtanga mo Tiglao! gusto mo namang sa ibang bansa sila magpunta gunggung, kaysa sa sarili mong bansa!

  • http://www.facebook.com/profile.php?id=100000405903680 Garo Ungaro

    That move by Japan is an offshot of the present situation with China. Japan/China trade  is $350B but Japan got burned by Chinese/Japan rift in the SCS area. $20B is a good investment by Japan…lowering the power expenses in business/manufacturing  is a key to any investment…thats one reason why investment is not much high energy/power bills. Hope, this bring a positive  improvement on local/domestic/international partnership…Japan gambles for the good of the ASEAN neighbors, instead on China….Hope, the Philippines will show Japan that we are worthy of this good investment…Remains to seen…again?…

    • http://twitter.com/erncastillo ern

      the cost of power supply only comes second. For as long as it is affordable there should be no problem…but of course less is better. Economic progress will give more income and therefore better affordability. What is important is to sustain the quality of products so it becomes attractive  internationally. In the end, people will stop buying cheap substandard goods in favor of better products although at higher prices.

      Even in the philippines, why do people from the provinces flock to manila even if the costs of food and housing are higher? …. yes, because of the quality of life.

      • Karabkatab

        “Even in the philippines, why do people from the provinces flock to manila even if the costs of food and housing are higher? …. yes, because of the quality of life.”
        The quality of life in Manila is better than that of the provinces?  I beg to disagree ern.

  • kalikasanipagtanggol

    O sa japan pala dapat mas maging loyal ang pinas eh bakit pilit dinidikdik ang mukha ng pinas sa puti yagbols!

    • phantomofhope

      walang yagbols kasi mga lider natin…kaya sunud-sunuran na lang sa puting yagbols

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