Japanese firms in Philippine 2nd most bullish in Asia, Oceania

By Richmond Mercurio (The Philippine Star), Dec. 29, 2016

MANILA, Philippines – Japanese companies operating in the Philippines are the second most bullish across Asia and Oceania in terms of being profitable this year, a new survey by the Japan External Trade Organization (JETRO) showed.

Based on a report from JETRO Japanese firms in Korea recorded the highest profitability rate at 81 percent followed by the Philippines at 77.5 percent.

The rate, meanwhile, was below 40 percent in countries where many Japanese companies have comparatively shorter operational histories such as Myanmar (25.7 percent), Cambodia (30.3 percent), and Bangladesh (35.2 percent).

Overall, Japanese firms operating in Asia and Oceania expecting profitability for 2016 accounted for 62.8 percent, a slight increase from the 62.2 percent in the 2015 survey.

Those expecting a deficit, meanwhile, came to 21.8 percent, down from the 22.8 percent in last year’s survey.

The Philippine economy was able to sustain its strong economic showing this year, allowing most foreign firms with Philippine operations to enjoy profitability.

The survey showed that strong intentions of expanding business in the next one or two years were seen highest in Myanmar at 79.7 percent, Cambodia at 72.5 percent, Pakistan at 71 percent, and India at 70.7 percent.

In Southeast Asia, the response rate for expansion rose 1.2 points this year to 55.4 percent, JETRO said.

The report likewise indicated that local procurement rate in China, Thailand, India, Vietnam and the Philippines increased compared to their levels in 2010, with significant growth in Vietnam.

“Looking at the results of ASEAN major countries, Thailand, Indonesia, Malaysia, Vietnam and the Philippines saw an increase in rate of procurement from China compared to 2010. With the exception of Indonesia and Malaysia, all of these countries also saw a decrease in procurement from Japan,” JETRO said.

The Department of Trade and Industry expects to advance trade and investments with Japanese firms next year following a successful state visit of President Duterte in Japan in late October where he met with Japanese Prime Minister Shinzo Abe.

The trip yielded a total of 12 business agreements worth $1.8 billion. Japan is the country’s largest trade partner with over $18 billion in total trade.

The JETRO survey was conducted from Oct. 11 to Nov. 11 to look into the business conditions of Japanese companies in 20 countries and regions in Asia and Oceania.

These regions include 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 received valid replies from 4,642 companies.