A demographic partnership between Manila and Tokyo has become more feasible following the enactment of economic liberalization measures that opened wide the Philippines to foreign investors, the Department of Finance (DOF) said.
During his recent meeting with Japan Minister for Foreign Affairs Yoshimasa Hayashi in Tokyo, Finance Secretary Carlos G. Dominguez III reiterated his proposed demographic partnership between the two countries.
This partnership has now become even more feasible with the recent enactment of three Philippine laws that further liberalized the economy, the finance chief said.
These laws are the amendatory measures to the Public Service Act, Foreign Investments Act, and Retail Trade Liberalization Ac, all of which relaxed the restrictions on foreign ownership in certain Philippine businesses.
By demographic partnership, Dominguez has proposed that Japan will provide the research, technology, and resources, while the Philippines will do the marketing and manufacturing side by lending the skills of its young, talented workforce.
The partnership is beneficial to both nations, as Dominguez said Japan’s forward-looking enterprises and more experienced and highly skilled labor force with a median age of up to 46 years old complement the Philippines’ young, technology savvy workers whose average age is 24 years old.
Dominguez’s proposal comes as the DOF expects that the enactment of economic liberalization reform laws would result in high growth in foreign direct investments (FDIs).
Economic liberalization reforms allow more firms to set up shop, which effectively expand the universe of potential employers and give competition to entrenched old boys’ club, Finance Chief Economist Gil S. Beltran said.
In 2021, Philippines’ FDIs hit an all time high of $10.5 billion, surpassing the previous record high of $10.3 billion in 2017.
FDI is defined as an investment by a non-resident or foreign direct investor in a resident enterprise or an investment made by a non-resident subsidiary or associate in its resident direct investor.
FDI can be in the form of equity capital, reinvestment of earnings, and borrowings.
“The growth in FDI reflected continued positive foreign investor sentiment on the country amid expectations of a rebound in domestic economic activity and declining Covid-19 reported cases, as well as the strengthening of the global economy,” the central bank said.