More Japan Firms Moving to Philippines from China

As if the “war” between China and the Philippines will never end.

Japan, through the Chamber of Commerce and Industry (JCCIP) in the Philippines, recently announced that some 200 Japanese companies have begun relocating their manufacturing business from China to this Asian country as early as last year.

JCCIP executive director Nobuo Fuji said that 200 to 300 Japanese establishments signified their intention of moving their business “because the Philippines is a very competitive country.”

Most of the companies are engaged in information technology (IT) while others are into automotive and parts manufacturing. In July this year, the Philippines’ trade and industry department, received a number of Japanese investors, according to Undersecretary Adrian S. Cristobal, Jr. “Japan has been instrumental in improving the Philippines’ business environment and addressing infrastructure developments through its Overseas Development Assistance (ODA).

“We greatly value and welcome inputs of the Japanese in rolling out the country’s major infrastructure projects to sustain the upward momentum of the Philippine economy,” Cristobal said, in a published interview.

At present, there are about 1,700 Japanese companies in the Philippines. Fuji added that in China, Japanese investors face a string of problems including wage increase, historical problems, labor strikes. Over the past five years, minimum wages in China have almost doubled, according to reports. Also common are labor-management disputes over factory closures.

In relation to the current maritime dispute with China, Philippine President Benigno Aquino, Jr., along with Japan Prime Minister Shinzo Abe, issued a joint statement last June, lashing out at their common “enemy” for its continued reclamation work in the West Philippine Sea or South China Sea.

China has been very assertive in its move to solely claim the area,
where they had already constructed airstrips and other infrastructure projects.

Meanwhile, being an English-speaking workforce and tax benefits given by the Philippine government are two of the reasons why Japanese investors want to relocate to the Philippines. The young workforce, “is the big strength of Filipino society,” according to Akio Mimura, JCCI chairman and head of the organization’s business mission. “For any country, the power of growth comes from the number of working population. This country is filled with growth potential and strength.”

Bilateral trade between Japan and the Philippines is over US17 billion or 14.5 percent of the Philippines’ global trade. Committed Japanese investments last year represent over 16 percent of the Philippines’ foreign direct investments (FDIs) – the bulk of which is in the manufacturing sector./The Junction News Team