Japanese firms slow down on Asean expansion plans

MANILA, Philippines – The intention of Japanese companies to expand business in the next one or two years in the 10-member countries of the Association of Southeast Asian Nations (Asean) has declined, but these firms still expect business to be profitable in countries like the Philippines, a survey by the Japan External Trade Organization (JETRO) showed.

JETRO said Japanese companies with intention to expand business in Asean as a whole dropped to 54.2 percent, down 6.1 points from the 2014 survey it conducted.

By country, it said Indonesia, Cambodia and Thailand saw a double-digit decline each, while strong intentions of expanding business were seen in Myanmar.

Companies expecting operating profits for 2015 to be a surplus, however, remained strong with over 70 percent of Japanese firms in the Philippines seeing profitability this year.

The rates for Korea at 77.2 percent and Taiwan at 74.7 percent marked the highest in Asia and Oceania, closely followed by Pakistan, Australia, the Philippines and Thailand with over 70 percent.

Meanwhile, JETRO said the rate was below 40 percent in countries like Myanmar, Bangladesh and Cambodia where many companies have shorter operation histories than in other countries.

The JETRO report surveyed the business conditions of Japanese companies in 20 countries and regions in Asia and Oceania including Northeast Asia (mainland China, Hong Kong, South Korea, Taiwan and Macau), Asean (Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand, Vietnam and Laos), Southwest Asia (Bangladesh, India, Pakistan and Sri Lanka) and Oceania (Australia and New Zealand).

The survey, which was conducted from Oct. 8 to Nov. 13 this year, sought to identify whether the intention of Japanese companies to expand business has reached a point of saturation or not.

Data from the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) showed that Japan is the second largest country investor in the Philippines in the first six months of 2015.

Total BOI and PEZA approved investments from Japanese investors during the period reached P10.97 billion, slightly lower than the P11.05 billion recorded in the same period last year. –Richmond S. Mercurio (The Philippine Star)