Ayala-led Bank of the Philippine Islands and Mizuho Corporate Bank of Japan have established a banking alliance meant to harness opportunities from a new wave of Japanese investments into the Philippines.
Mizuho Corporate Bank – the corporate and investment banking subsidiary of Japan’s biggest conglomerate, Mizuho Financial Group—moves to further deepen its involvement in the Philippines. It also signed a partnership framework with the Philippine Economic Zone Authority on Monday.
“We’re very honored to be the partner of Mizuho. I think BPI has a long history of dealing with Japanese names. The positive side is, typically, when Japanese companies come here, they get involved in manufacturing, which creates lots of jobs and also enables us to offer both consumer and SME (small and medium enterprise) facilities because they also deal with suppliers,” BPI president Aurelio Montinola III said in an interview after the signing.
Montinola said there were big waves of Japanese investors coming to the country in the 1970s and 1980s, which sort of quieted down later. “Now, it’s going up again,” he said.
Hiroshi Suehiro, Mizuho managing executive officer and head of Asia & Oceania excluding East Asia, said the number of Japanese companies investing in the Philippines was “rapidly increasing” particularly in electronics and machinery manufacturing. “That trend will continue,” he said.
Another current trend is the entry of Japanese retailers such as UniQlo and Muji, which seek to tap rising consumer affluence in the country.
The Mizuho executive said Japanese investors were drawn by the political stability under the Aquino regime and the good economic growth trajectory. “More importantly, there’s a large number of quality labor force, young and English-speaking, well-educated,” he said.
“Many Japanese companies in the past were investing in Vietnam, China or some other countries but we’re seeing some kind of labor shortage or rapid increase of wages (there). We think many Japanese companies now re-recognize the strengths, the advantages of (doing) business in the Philippines,” Suehiro said.
Mizuho opened its Manila branch in 1995 and has since then expanded mainly for Japanese companies and some Philippine companies. Recently, interest among Japanese companies in the country was growing.