Philippines up a notch in Japan firms’ list of preferred investment sites

by Richmond Mercurio (The Philippine Star) – Apr 24, 2018

MANILA, Philippines — The Philippines climbed a notch higher in the list of the most preferred investment destinations of Japanese companies in the world despite the country’s political situation and security becoming a more prevalent concern for investors.

In its 2017 Survey on the International Operations of Japanese Firms, Japan External Trade Organization (JETRO) showed the Philippines ranked as the 12th most popular country to expand business among Japanese companies, an improvement from its 13th position in 2016.

Among firms answering that they “currently have an overseas base and are planning to expand,” the ratio choosing China emerged on top at 49.4 percent, followed by Vietnam with 37.5 percent and Thailand with 36.7 percent.

The Philippines placed 12th on the list amid a slight drop in the ratio with 13.1 percent in 2017 from 13.4 percent the previous year.

Among Association of Southeast Asian Nations economies, the country ranked sixth.

“The countries of ASEAN-6 as a whole (69.2 percent) have exceeded China (49.4 percent) for the sixth consecutive year as a major country/region for overseas expansion. Within ASEAN-6, a significant increase in motivation to expand business is seen in Vietnam for non-manufacturing along with the Philippines in manufacturing,” JETRO said.

Market size was the top business attraction and advantage cited for the country, receiving a nod from 72.7 percent from the companies surveyed.

This was followed by labor cost/force at 29.7 percent, pro-Japanese feeling at 26.4 percent and communication at 20.6 percent.

Meanwhile, political/social situations and security emerged as top business environment issue of Japanese companies in the Philippines at 33.9 percent.

Other issues identified include infrastructure, collection of bills, legal system and its enforcement, and administrative procedures.
A total of 9,981 Japanese firms with interest in overseas business have been part of the 2017 survey. Of these companies, 11.9 percent have overseas bases in the Philippines.