It’s the year of the fire monkey, and as volatility best describes fire and the monkey, the Chinese zodiac warns the business community to brace for mischievous ups and downs especially in the first quarters before a semblance of recovery manifests itself.
This uncertainty is something many economists agree on, given the Chinese economy’s continued deceleration and the still-slow recovery of the world’s major economies. But a silver lining on the dark clouds seems to be forming.
For Japan, which has been regarded as the best performing developed market in the world since 2013, things may seem to be more upbeat. And the recent symbolic visit of the Japanese imperial couple to the Philippines recently is a good starting omen.
New economic opportunities for both the Philippines and Japan are expected, starting with the car manufacturing sector and Japanese global retailer Uniqlo, the latter about setting up a factory here for its Heattech line of apparel.
For the car manufacturing sector, the Philippine government approved the Comprehensive Automotive Resurgence Strategy (CARS) Program which provides investment incentives in the manufacture of whole body large plastic parts and other strategic parts that are not currently produced locally.
Targeted mainly for small and medium enterprise development, the downstream component will be a key building block program for CARS, and will help boost local content in future vehicles sold in the Philippines as well as boost employment in the industry.
Japanese car brands put together account for a decidedly dominant share of the Philippine market. This, together with a continuing resilience in our economy, has unjustly been blamed for the worsening traffic condition in Metro Manila.
Nevertheless, the Japan International Cooperation Agency (JICA) continues to take a keen interest in funding studies on how to solve Metro Manila’s, and a few key urban centers’, traffic nightmares.
Unmistakably, over the decades, the bilateral relationship of the Philippines and Japan has improved tremendously. Japan continues to be a major trading partner, thanks to the Japan-Philippine Economic Partnership Agreement (JPEPA) signed between the two countries in 2006.
The Department of Trade puts trade growth between the two countries at an average of seven percent annually from 2010 to 2014 despite the global economic slump. In terms of value, the latest trade estimate for 2014 was at $19.15 billion.
Philippine exports to Japan, mostly food products, have continually outpaced imports since 2010. And food exports, most especially those of fruits, are expected to continue growing stronger as the Japanese consumers’ demand for a healthier diet continues.
The current JPEPA terms, already up for review, are expected to be further relaxed, therefore even deepening further the existing trade relationship between the two countries. The Philippines is asking for zero duties on more products and the scrapping of quotas for pineapples and bananas.
Not to be forgotten would be the improved flow of manpower from the Philippines to Japan, particularly in the field of health and maritime. We have been sending nurses and caregivers annually to Japan for training, while Filipino maritime workers have become a dominant force in Japan’s sea-faring industry.
While Japanese tourists are coming back to the Philippines to enjoy their holidays, Filipinos are returning the “favor” by choosing Japan as their go-to vacation destination these days. This give-and-take reciprocity augurs well towards balancing our two countries’ tourism relationship.
The recent influx of Filipino tourists to Japan has been due to the partial relaxation of visa processing requirements, coupled with the availability of low budget fares and proliferation of cheaper bed-and-breakfast lodging in major cities in Japan.
On the other hand, with Japan’s economy on the mend, their nationals have once again been booking flights to and accommodations in popular Filipino tourism sites. Hopefully, Japan will ease further its visa requirements to allow more tourists to visit their many cultural and dining attractions.
There are many other areas where the Philippines could become valuable to Japan and its businesses. One of this is in shipping, particularly in ship building and repair. The Philippines’ long coastline and its many natural harbors make it an attractive site for shipyards.
A huge segment of the Japanese population is also of retirement age, and the Philippines is a perfect haven for retirement, even if just during the months when Japan’s winds are freezing cold and truly uncomfortable for its senior citizens.
The energy and infrastructure sectors are also attractive areas for Japanese investors. The Philippine government has been actively seeking for partners willing to finance multi-billion peso projects under its public-private partnership program.
And finally, Japanese SMEs would find the generous terms of relocating to our export processing zones attractive enough. While EPZ locators have limited contribution to the overall economic GDP figures, they provide jobs to many of our countrymen outside the urban centers.
The country’s relationship with Japan during the last world war may have started with so many atrocious memories, but thankfully, with the passing of time and the humility the Japanese royals have always assumed towards Filipinos, this is being buried in the past.
As global barriers are lifted, Japanese and Filipinos alike are learning there are better ways of living and finding happiness – and the physical act of war or aggression is definitely not one of them.
Just as Japan is slowly opening its arms to Filipinos and learning to respect them, so are we realizing that the Japanese who trampled on our dignity eight decades ago are but simple folks who also deserve the respect of others.
Best of all, both of our countries realize that one need not be an aggressor or be vanquished to be able to survive in this world – and there are more urgent problems that need to be taken cared of in one’s backyard, in one’s country, or in the world, whether one is Japanese or Filipino.
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