Japanese investors expressed their strong interest in expanding their business to the Philippines, given the country’s potential to be the regional hub for smart and sustainable manufacturing and services in Southeast Asia.
The Board of Investments (BOI), as the lead investments promotion agency of the Philippines, presented the current Philippine business climate and strategic investment opportunities to the Japanese business community during the Philippine Investment Webinar 2023, organized with MUFG Bank, Ltd. (MUFG) and Security Bank Corporation (SBC), held on September 12, 2023.
Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo told the Japanese investors that the Philippines has seen more interest from investors and more projects realized after the passage of the game-changing economic policy reforms. These reforms include amendments to key legislations such as the Retail Trade Liberalization Act, Foreign Investments Act, Public Services Act, and on the implementing rules and regulations of the Renewable Energy (RE) Act.
The BOI recorded a 203%-growth with Php698 billion worth of investment approvals for the first half of this year. Notably, foreign investment approvals of BOI accounted for 60% of the total approvals equivalent to Php423 Billion, a 52-fold increase from the first half of 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 the 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, Mr. Hirofumi Umeno, Senior Vice President and Head of MUFG Business Development of Security Bank Corporation, said that investing in the Philippines is advantageous as the country has an abundant labor force and high-level English-speaking skills coupled with the relaxation of the foreign investment restrictions, particularly in renewable energy.
Executive Director Evariste Cagatan of the BOI’s Investments Promotion Services, in her presentation, invited the Japanese business community to invest in Renewable Energy, Electric Vehicles, Green Metals, Agribusiness including Logistics, IT Services, and Healthcare industries – areas where the Philippines and Japan have strong complementation.
“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. Furthermore, 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,” she said.
On the Trade Opportunities for Japanese Firms, Director Bianca Pearl R. Sykimte of the DTI’s Export Marketing Bureau said that the Philippines is among the top global suppliers of products being imported by Japan. In her presentation, she pointed out that there is a wide scope for the Philippines and Japan to expand bilateral trade based on existing and projected demand and the existing supply capacities.
According to Mr. Takeshi Nakashima of Mitsubishi UFJ Research and Consulting, there are many business opportunities in the Philippines. To capture the local market and expand transactions, however, the key is to build good relationships with local partners.
Mr. Masahiro Matsumoto, Managing Director of the Transaction Banking Division of MUFG Bank, Ltd., also expressed his gratitude to the officials for the collaboration as they work together in unison to foster a deeper understanding of the Philippines and promote future growth.
Last February, President Ferdinand Marcos, Jr. visited Japan, yielding 35 business agreements with over US$13 billion in investment pledges and approximately 24,000 jobs in various sectors such as auto and auto parts manufacturing, electronics, agro-processing, renewable energy, telco infrastructure, and construction, among others.
Japan has been among the top sources of investments to the Philippines for several years now. In 2022, approved investments amounted to PhP51.98 billion – the highest recorded in the past five (5) years with 112% expansion from that of 2021.
In Q2 2023, Japan posted the highest investments commitment amounting to PhP20.36 billion (34.4%), followed by Singapore at PhP17.65 billion (29.9%), and Cayman Islands at PhP11.63 billion (19.7%).
Bilateral trade between the Philippines and Japan has bounced back higher than pre-pandemic levels, reaching USD 23.5 billion in 2022 on the back of a strong rebound of both Philippine exports to and imports from Japan.
In 2022, Philippine exports to Japan increased by 3.8% to USD 11.1 billion while imports from Japan grew by 11.2% 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 strong foundations to further grow trade between the Philippines and Japan.