More Japanese companies have expressed their interest in tapping prospective opportunities in the country, as both the Philippines and Japan seek to further enhance bilateral trade and investment ties following the recently concluded Asean-Japan Summit.
“It’s the desire of both parties to increase economic relationship. There is a very strong interest among Japanese firms to invest in the Philippines,” Trade Secretary Gregory L. Domingo said in a text message on Tuesday.
According to Domingo, Japanese firms are interested in investing in various local industries, such as plastic molded parts, banking, automotive, energy and infrastructure. About eight firms have reportedly conveyed their interest to the Philippine trade chief.
The Philippines is currently one of the preferred investment destinations of Japanese companies, given the lucrative investment regime available particularly for investors locating in economic zones.
As of end-July this year, there are over 700 Japanese companies or firms with Japanese equity that have set up facilities in various economic zones in the country, data from the Philippine Economic Zone Authority showed.
Apart from the incentives, the Philippines is also considered a viable location given the availability of a young, educated workforce, and competitive labor costs.
But the Philippine government is being urged to address critical issues, particularly the high electricity costs, so as not derail the prospective investments of Japanese firms.
The Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI) earlier warned that the Philippines could lose some of the projects unless reforms in the power sector, among others, were implemented.
JCCIPI vice president Nobuo Fujii told the Inquirer earlier that, while the Philippines is currently attracting the attention of Japanese companies, the government must still work to maintain a lucrative business environment.
Fujii proposed for the Department of Energy and the Energy Regulatory Commission to implement a uniform power rate within a single economic zone through a so-called “early aggregation scheme.”
Under the plan, even small locators, given their collective sizable power consumption, will benefit from competitive power rates other large power users are now enjoying through the open access scheme, Fujii said.—Amy R. Remo