20 December 2021 (Monday)
Pasay City – The Philippine Economic Zone Authority (PEZA) in its last edition of the Global Biz Forum featuring Japan held last Thursday, is tapping more Japanese investors to locate and invest in the Philippines for continued investment opportunities and economic relations between the Philippines and Japan. The goal is to catalyze industrial growth through the establishment of more economic zones.
Held via Zoom, 16 December, PEZA Director General Charito “Ching” B. Plaza discussed in the Global Biz with His Excellency Philippine Ambassador to Japan Jose C. Laurel V, His Excellency Japanese Ambassador to the Republic of the Philippines Koshikawa Kazuhiko, the Department of Trade and Industry (DTI) - Philippine Trade and Investment Center (PTIC) in Tokyo and the Japanese Chamber of Commerce and Industry of the Philippines, Inc., (JCCI).
Director General Plaza said, “To date, we have 962 Japanese locator companies among our 4,670 registered companies. These companies are engaged in warehousing and storage, fabricated metal products, rubber and plastic products, radio, television, and communication equipment and apparatus, as well as software development.”
“Our PEZA-registered Japanese enterprises generate PhP 727.679 billion investments which employ 353,763 employees and contribute $11.065 billion in exports,” Plaza adds.
Celebrating the 65th Anniversary of the Normalization of the Diplomatic Relations between the Philippines and Japan as well as the 10th year of the Bilateral Strategic Partnership of the two countries, Philippine Ambassador Laurel V expressed, “Japan continues to be one of our most significant trade, investment, and development assistance partners. For the first semester of 2021, year on year, Japan is our second highest trade partner, the second-largest investment source, and the top Official Development Assistance (ODA) bilateral contributor.”
PEZA Director General Charito “Ching” B. Plaza gave the latest report on PEZA-registered Japanese enterprises.
His Excellency Philippine Ambassador to Japan Jose C. Laurel V delivered his message of support to PEZA’s Global Biz Forum featuring Japan
Interests in technological innovations and human resources in PH
Japanese Ambassador Kazuhiko highlighted the country’s important role in the ASEAN logistics network noting that, “Building a strong supply chain and realizing a free and fair trade and investment environment is one of the most important factors for Japan and the Philippines to work [with] towards solving the universal problem on economic recovery brought by the ongoing pandemic”.
According to Ambassador Kazuhiko, Japan also prioritizes the realization of innovation and digitalization. He said, “We want to take investment opportunities in the field of science and technology, as well as in semi-conductors and communication fields, promote start-up support, and develop human resources.”
Aside from being strategically located in Southeast Asia with vast lands for various economic activities, PEZA Chief Plaza underlined the country’s young, dynamic, and English-speaking workforce.
Plaza said, “The Philippines takes pride in our young Filipino workforce with high proficiency in the English language, are college graduates, dependable and hardworking.”
This has been seconded by the Japanese Ambassador saying, “There are several factors that attract international companies and one of those is the Philippines’ rich and high-quality working population. In contrast to Japan where the working population is declining significantly, the Philippines is expected to continuously grow.”
Stating that Filipinos’ skills are beyond his expectation, President of Toshiba Information Equipment Philippines (TIP), Mr. Jun Ito joined the Global Biz to represent Japanese investors registered with PEZA. The TIP President said, “Our strong Filipino workforce is skilled in many fields especially in manufacturing and engineering. The Philippines has around 80,000 engineering graduates every year.”
President of Toshiba Information Equipment Philippines (TIP), Mr. Jun Ito delivered his statement on the advantages why Toshiba is attracted to stay in the Philippines
Japanese investors in PH
Present as well in the virtual forum were PEZA ecozone developers, namely the President of LIMA Land, Inc. and Cebu Industrial Park as well as head of Aboitiz InfraCapital’s Economic Estates, Mr. Rafael Fernandez De Mesa, and President of the First Philippine Industrial Park (FPIP), Mr. Francis Giles Puno.
Mr. Fernandez de Mesa assured prospective Japanese stakeholders during the virtual forum that “PEZA’s proven track record of attracting investments into the country has been instrumental in helping us at Aboitiz InfraCapital realize our growth and expansion over the years.”
“Today, Aboitiz InfraCapital’s three Economic Estates in Batangas and Cebu employ 100,000 Filipinos and host 192 companies, 74 or 39% of which are Japanese,” he adds.
Mr. Puno has also shared FPIP’s long-standing collaboration with PEZA stating, “With PEZA, we have been able to build a strong and thriving ecosystem within the park, attracting leaders of industries such as in electronics and semiconductors, automotive components and wire harness, aerospace, medical technologies, food and beverage, and many more.”
According to him, “Within this ecosystem, 74 of our 147 world-class locators, about 50%, are highly respected Japanese companies who have sought to expand their operations in the Philippines.”
Keen support to CREATE and PEZA-Visa issuance
Meanwhile, under the current CREATE LAW and PEZA tax incentives, Japanese companies registered under PEZA benefit from various incentives such as the Income Tax Holiday (ITH) of 4 to 7 years for export enterprises and 5% Special Corporate Income Tax or Enhanced Deductions for 10 years.
The Director General Plaza highlighted, “Other fiscal incentives PEZA provide include the Tax- and duty-free importation of capital equipment, raw materials, spare parts or accessories, VAT exemption on importation and VAT zero-rating on local purchases for goods and services directly or exclusively used in the registered project or activities and domestic sales allowance of up to 30% of total sales, among others.”
Japanese Ambassador Kazuhiko believes that these incentives being enjoyed by many PEZA-registered stakeholders are an attractive [and effective] measure for more Japanese businesses to invest in the Philippines.
He noted, “Thanks to these incentive measures, we have about a thousand Japanese companies currently registered under PEZA bringing the highest total investments in the country’s economic zones.”
Toshiba President Mr. Ito shared that “the fiscal incentives are very important in keeping our business competitive. During the height of the strictest quarantines last year, and the movement of our employees, our import and export shipment was never an issue.”
On the part of the Japanese business community in the Philippines, JCCI President and General Manager of Mitsubishi Corporation in Manila, Mr. Keiichi Matsunaga said, “PEZA’s response to the TRAIN Act and CREATE Law validated the essential role that foreign companies play in this economy. I commend PEZA for its proactive communication with the Department of Finance (DOF) and the Bureau of Internal Revenue (BIR) on many matters in relation to these laws.”
Matsunaga also commends the Agency’s initiatives for the shorter processing of the PEZA-Visa. He said, “This has been expedited since December. It used to take one month, but now the process has been shortened to 10 days, which is very helpful for Japanese companies.
A group shot of PEZA Director General Charito “Ching” B. Plaza together with the Philippine and Japanese embassies with PEZA-registered Japanese enterprises and various Japanese stakeholders.