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Japan firms see PH as among most promising investment locations

By: - Reporter / @bendeveraINQ
/ 12:39 AM December 14, 2016

The Philippines remained among the investment destinations deemed most promising by Japanese firms, the latest survey conducted by the Japan Bank for International Cooperation (JBIC) showed.

JBIC’s Survey Report on Overseas Business Operations by Japanese Manufacturing Companies for fiscal year 2016 ranked the Philippines as the eighth most promising country/destination for overseas operations over the medium term.

Ranked first was China, followed by India, Indonesia, Mexico, Vietnam, Thailand and the United States. Behind the Philippines to complete the top 10 were Brazil as well as Malaysia and Singapore, which were tied at 10th place.
Retained ranking
The Philippines retained its 2015 ranking, with 51 out of 483 or 10.6 percent of the surveyed firms saying they found the country promising in the next three years.

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The country’s rankings have been going up from 11th in 2014 and 2013 and 14th in 2012.

In terms of sectors, Japanese electrical equipment and electronics manufacturers ranked the Philippines seventh; automobile assemblers placed the country at eighth place; while those producing general machinery ranked the country in ninth position.

The top five reasons why Japanese firms found the Philippines promising in the medium term include the future growth potential of the local market, the country’s inexpensive source of labor, the current size of the domestic market, it being a supply base for assemblers and a base of export to third countries.

But survey respondents also noted certain pressing investor concerns, such as underdeveloped infrastructure, difficulty in securing management-level staff, security and social instability issues, intense competition with other companies operating here, and underdeveloped local supporting industries.

Also, the country for the first time landed in the top 10 countries or regions deemed promising over the long-term, from 11th place last year and following increasing percentage share since 2013, JBIC noted. India remained the most promising country over the next 10 years or so for Japanese companies.

However, the Philippines slid one notch to eighth place from seventh last year among the promising countries for mid-tier as well as small and medium enterprises (companies with paid-in capital of less than 1 billion yen) over the medium term.
As for expansion plans, JBIC said “the Philippines has been garnering attention,” ranking second behind Indonesia in Asean in terms of percentage of firms looking at expanding or strengthening production as well as sales, at 59.5 percent.

Japanese companies involved in metal products, transportation equipment excluding automobiles as well as electrical equipment and electronics also chose the Philippines as the country where they have the highest satisfaction in terms of profits.

The Philippines was also ranked ninth among the countries and regions deemed more profitable than Japan.

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