13 Japanese firms to invest $1.24 B in new projects

MANILA, Philippines — Some 13 Japanese firms are planning to invest a total of $1.24 billion in new projects in the Philippines, the Department of Trade and Industry (DTI) said. 

Trade Secretary Ramon Lopez said the $1.24 billion worth of investments would be spent for various projects in the manufacturing, agriculture, retail, real estate, automotive, as well as education sectors, and create 16,000 jobs. 

Lopez met with representatives of 20 companies in Japan last week as he attended a business forum organized by the DTI with the Philippine Trade and Investment Center. 

Among the Japanese firms planning to invest in the country this year is Mitsubishi Corp. through a $76 million joint venture project with a Philippine real estate firm to offer affordable housing. 

Mitsui O.S.K. Lines Ltd.’s $5.3 million investment, meanwhile, is for the Magsaysay Maritime – Mitsui O.S.K. Lines’ Maritime Academy.

Itochu Corp. through  subsidiary Dole Philippines Inc. or Dolefil, is also spending $19.2 million for a waste-to-energy project to convert pineapple waste into biogas. 

Itochu’s joint venture project with infrastructure conglomerate Metro Pacific Investments Corp., is expected to produce electricity that can replace 20 percent of their yearly grid requirement. 

ISE Food is likewise pouring in $250 million to put up a large-scale poultry farm with Philippine companies. 

Composed of five integrated farms, the project will offer 1,000 jobs and train Filipino workers on the latest technology for poultry farming and fortified egg production. 

As for Sumitomo Wiring Systems Inc., it is set to invest $46 million for a manufacturing facility wire harness systems used in auto vehicles, and generate 13,000  jobs.

Lopez said Sumitomo is looking for a 20-hectare area for the location of the manufacturing facility and the BOI is providing assistance in helping find possible sites. 

In addition to the five firms, other Japanese firms keen to invest in the Philippines include Terumo (Philippines) Corp. which is engaged in the manufacture, sale and export of medical devices and planning to expand by developing new products in the country, NIDEC which is looking to establish an automation team in the country for the mass production of devices for robots, as well as Nomura Real Estate and Isetan Mitsukoshi Holdings which would work together to build malls in the country, and Tescom which is engaged in design and sales of hair dryers and other home appliances. 

Other Japanese firms planning to make investments did not want their names to be disclosed, as well as the amount they intend to pour into the country.

“These expansion projects and new investments are proof that foreign companies have strong confidence in our country’s economic stability and business environment under the Duterte administration. They wish to grow their business and partner with us in providing more jobs and opportunities for Filipinos,” Lopez said. 

While the firms are interested to invest in the Philippines, he said some are still concerned over the government’s planned change in the incentives regime under the proposed second package of tax reform or the Tax Reform for Attracting Better and Higher Quality Opportunities (TRABAHO) bill.

Approved on third and final reading at the House of Representatives, the TRABAHO bill seeks to reduce the corporate income tax rate gradually to 20 percent from 30 percent, and introduce changes to incentives enjoyed by investors including the removal of the payment of five percent gross income earned (GIE) in lieu of all taxes by firms registered with the Philippine Economic Zone Authority (PEZA). 

The GIE is considered a key incentive for firms opting to invest in the country’s economic zones and register with the PEZA. 

Lopez said he discussed with Japanese firms the steps being taken by the DTI to address their concerns which includes pushing for a longer transition period for the GIE of 10 to 15 years from five years. 

As Japanese firms, particularly those in the electronic sector, expressed concern in some requirements of the Bureau of Fire Protection in giving clearance to firms, Lopez said the DTI would engage with the agency to discuss the issues raised and find a workable arrangement.