PH still a favorite among Japanese investors

The Philippines has kept its ranking as the seventh most attractive foreign destination for Japanese investors for the third-straight year, the Japan Bank for International Cooperation (JBIC) said.

In a March 30 report, JBIC said its 33rd annual survey conducted from July to October 2021 showed that among Japanese firms, the 10 most promising countries or regions for overseas business over the medium term or the next three years were China at No. 1 spot; India; the United States; Vietnam; Thailand; Indonesia; the Philippines; Mexico; Malaysia; and Taiwan.

The Philippines held on to the seventh spot, where it had been placing yearly since JBIC’s survey in 2019.

Among 345 companies surveyed last year, 31 or 9 percent of total said the Philippines was a viable foreign investment destination over the midterm. In the 2020 survey, a bigger number—37 or 10.4 percent of 356 survey respondents—chose the Philippines.

In the latest survey, the United States rose to third place, while Vietnam and Thailand dropped one notch each to fourth and fifth, respectively. Mexico and Malaysia switched places to eighth and ninth; Taiwan moved up to 10th position from 12th in 2020. Besides the Philippines, China, India and Indonesia maintained their prior year’s spots in the 2021 survey.

Last year, JBIC said more than half of the 2020 respondents that chose the Philippines pointed to the “future growth potential of the local market,” while less than half said the country being an “inexpensive” labor source was a come-on.

However, nearly half of Japanese companies were wary about security and social “instability” in the Philippines.

One-third of respondents also cited “unclear” execution of the legal system as a major issue when setting up shop here.

The other perennial concerns of Japanese investors about the Philippines included rising labor costs, underdeveloped infrastructure, as well as difficulty to secure management-level staff.

—Ben O. de Vera