Japan extends P3-B aid for PH supply chain

Published January 11, 2021, 7:00 AM

by Bernie Cahiles-Magkilat

The Japanese government is extending P3 billion (¥6.5 billion) financial assistance to 7 Japanese manufacturers in the Philippines to strengthen and build a more resilient supply chain in the country to avoid supply disruption of their operations during natural calamities and disasters, including the COVID-19 pandemic. 

Data from the Japan External Trade Organization (JETRO) identified these beneficiaries as Arktech Philippines, Inc. Precision (sheet metal for semiconductor and medical devices), Taketora Philippines, Inc. (medical gowns), Yokoisada (Phils.) Corporation (surgical masks for medical use), Arkray Industry, Inc. (electric circuit board for medical testing systems), Sytecs Manufacturing Philippines, Inc. (IC chip tray), Sumi Philippines Wiring Systems Corp. (wiring harnesses for automobiles), and Rohm Electronics Philippines, Inc. (thermal printhead).

Of the total amount budget allowance, P2.316 billion (JPY5 billion) have been earmarked as budget allowance for the Arktech, Taketora, and Yokoisada. The remaining P695 million (JPY1.5 billion) will serve as budget allowance for Sytecs, Arkay, Sumi and Rohm.

JETRO Manila Executive Director Takashi Ishihara told Business Bulletin that the above-mentioned numbers are general settings of this program, the actual amount supported by the Japanese government for each project has not been confirmed.

Ishihara said that Japanese companies are building more resilient supply chain against disaster like COVID-19 under the “Strengthening Overseas Supply Chain” program of the Japanese government.

Ishihara said the “Strengthening Overseas Supply Chain” is a financial support program which will cover expenses for the introduction of facilities and equipment related to the goods and materials through global supply chains with a higher degree of concentration of the production bases (manufacturing plants), with the aim of diversifying supply sources.

With that, he said, the Japanese government is “financially supporting the 7 Japanese manufacturers that will invest their capital equipment.”

JETRO is now conducting a program to strengthen overseas supply chains of Japanese companies, under the supervision of METI (Ministry of Economy, Trade and Industry, Japan).

 He noted that as COVID-19 caused functional failures of global supply chains due to the over concentration of production bases, Japanese government is helping Japanese manufactures to diversify their manufacturing functions in various countries to avoid the risk.

The COVID-19 pandemic has caused serious disruption to global supply chains, resulting in shortages of various products. The primary cause of these disruptions is vulnerabilities in supply chains with a high degree of concentration of production bases (manufacturing plants).

This program is aimed to enhance the viability of industries by strengthening supply chain resilience.

 It provides support for voluntary corporate initiatives for the purpose of diversification of the production bases in order to strengthen the supply chain resilience.

But the program is not designed to facilitate the relocation of companies’ production bases to other countries other than supporting a variety of corporate initiatives for strengthening supply chains resilience including support for construction of additional manufacturing plants and enhancement of production/logistical efficiency by utilizing digital technologies.