Japan firms still keen on expanding

MANILA, Philippines — Japanese companies in the Philippines are keen on expanding their operations but warn attracting new ones could pose some challenges. 

In an interview, Japan Chamber of Commerce and Industry of the Philippines president Hiroshi Shiraishi told The STAR Japanese firms here are optimistic on their prospects, most of which are even looking to expand.

“The situation for Japanese companies here, those with existing factories and the locator companies, is they are very aggressive to expand. Fundamentally, it’s not like they have a negative prospect. Existing companies here have positive prospects for the future,” Shiraishi said. 

“The challenge is how we can attract new investors. This is very challenging,” he said. 

With most big Japanese corporations already in the Philippines, Shiraishi said now is a good opportunity to entice small and medium-sized Japanese companies to invest and locate here. 

“We can see these possibilities for Japanese MSMEs to come in the Philippine market, but we need to be more attractive. We need to show how attractive the Philippine market is. It’s very important,” he said. 

Shiraishi said Japanese investors want to be assured the current set of incentives in the country would be continued. 

Furthermore, he said new Japanese investors would want an easier and better environment for business, such as a more relaxed Foreign Investment Negative List (FINL). 

“So easing of the negative list or a similar message will be of course more attractive to get new investors,” Shiraishi said. 

The government, for its part, had vowed to aggressively liberalize the 2017 FINL by opening up more areas of the economy to foreign investors. 

“In any country, like the Philippines, Japanese companies are looking for chances to come but we need to show a clear message that incentives will continue,” Shiraishi said.

Data from the Philippine Statistics Authority showed foreign investments approved by the country’s seven investment promotion agencies fell 54.9 percent in the second quarter to P18.2 billion from P40.4 billion in the same period last year.

For the first semester, total approved foreign investment commitments reached P41 billion, 38.4 percent lower than the P66.6 billion in the same period in 2016.

Meanwhile, preliminary data from the Japan External Trade Organization (Jetro) earlier showed Japan’s direct investment into the country plunged 56.6 percent to $561 million in the first five months of 2017 while Japanese investment in other Southeast Asian countries like Vietnam, Thailand and Singapore have risen double digits in the same period.

In 2016, Japanese investment in the Philippines surged 52.1 percent to $2.31 billion from $1.52 billion in 2015, the Jetro data showed.