Japanese cite obstacles in doing business in PH

DIFFICULTIES in refunding taxes and the impact of the Manila port congestion on local operations are among the biggest concerns raised by close to 80 prospective investors from Japan and other key markets.

“They are happy with the Philippines in the sense that we have [higher] credit ratings and we have eased doing business here. But there were issues that have come up such as the port congestion and the monetization of tax credits. While these issues won’t stop them from investing here, these remain a concern that must be addressed,” said Senen M. Perlada, director of the Export Marketing Bureau (EMB) at the Department of Trade and Industry.

The businessmen were in the country last week to scout for potential investment opportunities.

The delegation was organized by the Osaka International Business Promotion Center (IBPC Osaka), a subsidiary of the Osaka City Government in Japan established to promote trade, industry and business between Osaka and various parts of the world.

In an interview on Friday, Perlada also said investor outlook for the Philippines still remained positive given the investors’ expressions of interest in doing business here.

He also cited an earlier survey by the Japan External Trade Organization (Jetro), which showed that at least half of the Japanese firms operating in the Philippines are looking to pursue their respective expansion plans over the short term despite perceived challenges in the local business and regulatory environments.

Perlada said the business delegation that the IBPC Osaka brought here were representatives from cities that are part of the so-called Business Partner City (BPC). The BPC, initiated by the Osaka Municipal Government in 1988, is a network of 13 cities including Manila.

Member-delegates from Osaka, Melbourne, Kuala Lumpur, Bangkok, and Ho Chi Minh, among others, have expressed interest in the fresh and processed food, manufacturing, and the IT-business process outsourcing industries, Perlada said.

The Philippines, meanwhile, will also be sending a delegation this week to Osaka for a food and beverage exhibition and to discuss business with foreign buyers.

Foreign groups, over the years, have slammed the government for making it more difficult for tax-paying investors to exercise their right to refund. This does not only breach the trust of the companies operating in the country, but also hampers the entry of crucial foreign direct investments, they said.

The congestion at the Port of Manila last year, meanwhile, was said to have cost local businesses as much as P70 billion. Delays in shipments have resulted in production halts, work stoppages, and higher logistics costs, which then raised the end prices of goods and services.