MANILA, Philippines–Yuchengco-led Rizal Commercial Banking Corp. is looking to bring into the country more investors from Japan, particularly small and medium enterprises expanding industrial operations in Southeast Asia, with the help of leading Japanese bank Resona Bank Ltd.
RCBC brought in Resona in 2012 as a partner for its Japanese desk, which was instrumental in bringing to the country around P20 billion worth of new Japanese investments each year, said Yasuhiro Matsumoto, a Japanese expatriate who heads RCBC’s Japanese business relations office.
The desk so far has about 700 Japanese clients and deals with 70 percent of Japanese investors present in the country’s major industrial zones.
About half of its client base came in during the Ramos administration and an additional 200 are new investors enlisted during the Aquino administration, Matsumoto said.
As of end-2014, RCBC has generated P27 billion in deposits from Japanese clients, of which P23 billion was in the form of low-cost current account and savings account deposits.
The loan book of this desk is about P3 billion as Japanese locators were typically cash-rich and had no need to borrow for expansion, the bank executive said.
But apart from lending and deposit-taking, he said RCBC’s Japanese desk was helping Japanese investors look for industrial parks, technical services or even local partners.
In the next few years, Matsumoto expects the Japanese desk to expand its lending.
“I think more SMEs are coming with the support of Resona Bank. I think we should get more business,” he said.
In 2012, RCBC entered into a deal with Resona Bank, the fourth largest banking group in Japan, to extend to the latter’s customers various banking services, including lending and trade financing.
Matsumoto said it had been easier to sell the Philippines to Japanese investors in recent years, given its good economic growth prospects.
Last year alone, he said 40 trade missions came from Japan.
“A lot of Japanese companies are looking at this country as an investment place,” he said, noting that many were interested particularly in electronics and automotive manufacturing.
Most of the Japanese firms with factories in China are looking for alternative sites due to higher labor costs there. “One of them is the Philippines with its English-speaking population and cheap labor,” he said.
“But right now, the Japanese yen is very weak, so investment has slowed down,” he said.
Each year, RCBC’s Japanese desk is able to bring in 50 new Japanese clients.
So far this year, he said at least 10 clients were expected to bring in P5 billion in new investments to the country.
Compared to 10 years ago, he said the economic environment in the Philippines had greatly improved.
Among the areas that the country would need to work on, however, would be ensuring stable supply and pricing of electricity.
Foreign investors are likewise starting to see some skills gap at the manager level, with many professionals like engineers going overseas to work, he said.