Japanese investors urged to expand Philippines operations

by Louella Desiderio – The Philippine Star, 9 Sep 2021

MANILA, Philippines — The Department of Trade and Industry (DTI) is urging Japanese firms to consider investing and expanding operations in the country citing opportunities in manufacturing, construction, services and renewable energy.

“There is a wide scope of business opportunities for prospective and existing Japanese investors, particularly in manufacturing (electronics and semiconductor, medical devices, and agribusiness), construction, services and renewable energy, among others,” Trade Secretary Ramon Lopez said at the virtual Philippine economic briefing for Japanese investors yesterday.

He said the semiconductor and electronics industry is currently a top contributor to the Philippine economy, accounting for 62 percent of total exports, and hosting 500 global semiconductor and electronics companies.

Over the next five to 10 years, he said the country is focusing on the manufacture of drones, autonomous vehicles, smart home devices, virtual reality devices, digital health devices, micro satellites, wearable solar devices, augmented medical devices, 3D printers and collaborative robots.

Apart from electronics, he said medical devices manufacturing is also a growing industry with local demand projected to post a compound annual growth rate of 8.8 percent and rise to $884.3 million by the end of 2024.

In terms of agribusiness opportunities, he said the country is always on the lookout for partners and investors in the production and value-adding activities of the sector such as agricultural technology, logistics and marketing.

In the construction sector, he said there are many opportunities for Japanese firms given the government’s Build Build Build program for infrastructure development, and the country’s housing backlog which is expected to reach 12.4 million housing units by 2030, based on the industry roadmap commissioned by one of the country’s housing developers’ associations.

He said other available construction opportunities are in terms of office developments, transportation infrastructure, warehouse and cold storage facilities, and healthcare facilities amid the ongoing pandemic.

At present, the Philippine construction sector has diverse market players with the total number of licensed contractors seen to reach 30,000 and 46,000 by 2022 and 2030, respectively based on the construction industry roadmap from 15,322 as of March 2020.

In terms of renewable energy, Lopez said the country has competitive advantages in the clean and renewable energy sources like geothermal, hydro, wind, biomass and solar energy.

“For services we have a track record of collaboration with Japan in animation, engineering and architectural design. There are areas of opportunity for Japanese investments in logistics, smart manufacturing, electronics design services and Internet of Things,” he said.

Japan has been among the top five foreign sources of investment pledges in the country.

Last year, Japan ranked as the fifth top source of foreign investments with investment pledges amounting to $188.95 million or 8.4 percent of the total investments approved by investment promotion agencies (IPA).

For the first quarter, Japan was the top source of IPA-approved investments with $215.36 million worth of investment commitments, 739 percent higher than in the same period last year.