Japanese MSMEs eyeing PH route for global expansion

Japanese investors, who account for a large chunk of foreign direct investments in the Philippines, support the call for further retail liberalization here, noting it would help lure Japanese micro, small, and medium enterprises (MSMEs).

Hiroshi Shiraishi, president of the Japanese Chamber of Commerce and Industry of the Philippines, Inc. (JCCIPI), told reporters last week that a lower threshold capital in favor of foreign investors would be “better” for Japanese MSMEs, especially those that currently do not have a global footprint.

This came on the heels of an announcement from Socioeconomic Planning Secretary Ernesto M. Pernia that the government wanted to lower the current minimum paid-up capital for the retail industry to $200,000 from $2.5 million.

“If we can say that the easing of the restriction also includes the easing in retail trade, then it’s OK. It’s better if it’s included. We have to watch carefully what happens,” Shiraishi said.

The lower capital requirement for the retail industry would be part of the 11th foreign investment negative list (FINL), a document released every two years that details which industries would have limited participation from foreign companies. The list is expected to be signed by President Duterte before the year ends.

JCCIPI has added its voice to a growing divide among business chambers on the government’s plan. Some local business chambers wanted to maintain the status quo, arguing that any further lowering would be to the disadvantage of local MSMEs. Foreign business groups, as expected, backed the call, noting it would be beneficial to consumers who wanted a wide array of global brands.

Shiraishi said Japanese MSMEs would still need business partners upon entering the Philippines “so we can develop the market.”

The Japanese business chamber also called for the retention of perks currently being enjoyed under the Philippine Economic Zone Authority.

These perks could be scrapped if the House of Representatives’ version of the administration’s first tax reform package placing a 12-percent value-added tax on gross receipts would find support in the Senate.

Shiraishi said the chamber supports the Senate’s own version, filed as Senate Bill 1592, since it kept the perks.