Japanese cite power cost, infra lack as Jpepa hurdles

Japanese companies have raised the high local electricity prices, the lack of infrastructure and the need to improve the tax refund system between Japan and the Philippines as among the major constraints to the exchange of benefits under the Japan-Philippines Economic Partnership Agreement (Jpepa), the first free trade agreement for the country.

During the meeting of the second sub-committee on the improvement of the business environment between both countries, matters concerning improvement of the tax refund system, stable supply of electricity at a competitive price, and the improvement of Philippine logistics, including access to ports and airports, were discussed.

The body was constituted to draft proposals that would further heighten the level of business interactions and enhance future investments between the two countries. The body is co-headed by Trade and Industry Secretary Jesli Lapus and Ambassador Makoto Katsura.

Among those present during the meeting were representatives from various Philippine government agencies, Embassy of Japan in the Philippines, Japan International Cooperation Agency (Jica), and Japan External Trade Organization (Jetro).

The private sector was represented by Japanese Chamber of Commerce and Industry of the Philippines Inc. president Yasuhiko Arimitsu, and Ryan Evangelista representing Ambassador Donald Dee, chairman emeritus of the Philippine Chamber of Commerce and Industry, and Baltazar Endriga of the Management Association of the Philippines.

Cited in the meeting were gains from Jpepa which entered into force in 2008. Despite the recent economic crisis, the trade relations between Japan and the Philippines were relatively stable and, thus, the Japanese share of the Philippine trade expanded in 2009 compared with the previous year; Philippine export to Japan increased, in 2009, on some items such as shrimps, bananas, coconuts and apparels, while the tariff rates on such items had been lowered following the Jpepa schedules; Foreign direct investment from Japan to the Philippines increased in 2009, and thus the Japanese share of FDI to the Philippines in that year reached 58 percent; Remittances from Japan to the Philippines also increased from $575.2 million in 2008 to $773.6 million last year.

Lapus said that with the initial success of the economic partnership, the country expects the flow of more Japanese investments to the country and more Philippine goods to enter the Japanese market.

“The results are encouraging. Japanese and Filipino businessmen have not fully utilized the framework to the fullest, the door has been opened to both markets, businessmen have to seize the trade and investment opportunities
presented,” he said.

Lapus added said the challenge to Philippine firms is to explore and study the Japanese market where they can sell their goods. “Let us put to good use the fruit of years of negotiations that opened a lucrative market for Philippine goods.”  –Ayen Infante, Daily Tribune