The Board of Investments (BOI) has urged Japanese investors to consider the Philippines as an ideal regional hub for smart and sustainable manufacturing and services in Southeast Asia.
Trade and Industry (DTI) Undersecretary and BOI Managing Head Ceferino S. Rodolfo made his point in a presentation on the current Philippine business climate and strategic investment opportunities to the Japanese business community during the Philippine Investment Webinar 2023 recently. The webinar was organized by BOI with MUFG Bank Ltd. (MUFG) and Security Bank Corporation (SBC).
Rodolfo told Japanese investors that the Philippines has gained increased investor interest and project realization following the passage of significant economic policy reforms.
These reforms involve amendments to key legislations such as the Retail Trade Liberalization Act, Foreign Investments Act, Public Services Act, and Renewable Energy (RE) Act implementation rules.
Japan has been a top investment source to the Philippines for several years, with approved investments reaching P51.98 billion in 2022, marking a 112 percent expansion from 2021.
In the second quarter 2023, Japan exhibited the highest investment commitment at P20.36 billion, representing 34.4 percent, followed by Singapore at P17.65 billion or 29.9 percent, and the Cayman Islands at P11.63 billion or 19.7 percent.
The BOI saw a 203 percent growth, representing P698 billion worth of investment approvals for the first half of this year. It also noted foreign investment approvals accounting for 60 percent of total approvals which was a 52-fold increase from last year.
“We hope that many more Japanese companies will come to the Philippines to be part of our economic transformation miracle,” he told the attendees, as Japan has consistently been one of the country’s major trading partners and top sources of investment.
In addition, he assured Japanese enterprises that the BOI, together with its partner banks such as MUFG and SBC, will continue to provide support to them to make investment opportunities happen for them in the Philippines.
In his remarks, MUFG Business Development of SBC Senior Vice President and Head Hirofumi Umeno said that investing in the Philippines is advantageous as it offers advantages for foreign investment due to its abundant labor force, high-level English-speaking skills, and relaxed restrictions, especially in renewable energy.
Executive Director Evariste Cagatan of the BOI’s Investments Promotion Services, in her presentation, invited Japan's business community to invest in renewable energy, electric vehicles, green metals, agribusiness, logistics, IT services, and healthcare industries, highlighting their strong complementary relationship.
“With our strong economic growth, excellent human resources, rich natural endowments, strategic trade partnerships and access to key markets, Japanese companies can profitably operate from the Philippines in sustainability- and innovation-driven manufacturing and services,” she said.
Furthermore, she added that “the Philippines with its RE resources, coupled with strong government policy support and direction, can support the sustainable and net zero emission goals of Japanese companies.”
On the trade opportunities for Japanese firms, Director Bianca Pearl R. Sykimte of the DTI’s Export Marketing Bureau highlighted the Philippines' position as a top global supplier of Japanese products, suggesting potential for bilateral trade expansion.
Meanwhile, Mitsubishi UFJ Research and Consulting's Takeshi Nakashima highlighted the Philippines' numerous business opportunities, emphasizing the importance of establishing strong relationships with local partners.
President Ferdinand R. Marcos Jr. visited Japan in February, securing 35 business agreements, over $13 billion in investment, and creating 24,000 jobs across various sectors such as auto and auto parts manufacturing, electronics, agro-processing, renewable energy, telco infrastructure, and construction, among others.
Philippine-Japan bilateral trade reached $23.5 billion in 2022 – higher than pre-pandemic levels – boosted by strong export and import rebound from the pandemic.
In 2022, Philippine exports to Japan increased by 3.8 percent to $11.1 billion while imports from Japan grew by 11.2 percent with value reaching $12.4 billion.
Moreover, bilateral and regional partnership agreements such as the Philippines-Japan Economic Partnership Agreement (PJEPA), ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP), and the more recent Regional Comprehensive Economic Partnership Agreement (RCEP) serve as key initiatives in fostering trade growth between the two nations. (Ma. Joselie C. Garcia)