Long list of Japan manufacturers eyeing to locate in PH — official

Aya Lowe
Japan manufacturing companies lining up to set up shop in the Philippines

MANILA, Philippines – There is a long list of Japanese manufacturing companies looking to come to the Philippines, said Japanese Ambassador to the Philippines Toshinao Urabe.

Urabe said that aside from the manufacturing companies that are already present in the Philippines, there is a long list of new companies that are looking to enter one of the best performing economies in the world. 

“There are quite a few Japanese companies coming into the Philippines,” Urabe said at the Makati Business Club and the Japanese Chamber of Commerce joint membership meeting on Tuesday, June 25.

The most recent is Shimano, the Japanese bike manufacturer. The mountain bike brand will set up manufacturing facilities in the next year for export to the emerging markets of Brazil, Russia, India and China, or the BRIC countries.

Nobuo Fujii, vice president and executive director of the Japanese Chamber of Commerce and Industry of the Philippines, said Shimano will set up the factory at the First Philippine Industrial Park  in Sto. Tomas, Batangas.

There are roughly 1,700 Japanese companies located in the Philippines and more looking to come. These include Cemedine Philippines Corp., which manufactures and sells adhesive, ceiling and related products; Bandai, the toy maker of Power Rangers and Gundam fame; Fujifilm Corp., which makes optical lenses for digital cameras, projectors and surveillance cameras, and; electronics components maker Murata Manufacturing Co. Ltd.

Many of these companies are targeting Asia, Latin America and Europe for exports, according to the Japanese Chamber of Commerce and Industry of the Philippines (JCCIP), which has 500 member-companies.

Driving industry, real estate sectors in PH

The entry — and return — of Japanese manufacturing firms to the Philippines have been as cited as one of the legs of growth for the industry and real estate sectors in the Philippines in the 1st quarter.

Manufacturing grew 9.7% in January-to-March period, helping support the economy’s overall 7.8% growth.  

In a previous interview with Rappler, Julius Guevara, associate director for research and advisory at Colliers said they have received a number of inquiries from Japanese companies interested in putting up manufacturing facilities in industrial areas in and around Manila.

“In the past 6 to 12 months there has been an increased activity of Japanese moving manufacturing to the Philippines,” said Guevara.

“Japan continues to make an impact on various facets of life form history to economy to popular culture. In economic terms since 2009, Japan has been either the top or second largest source of approved foreign direct investments into the Philippines,” said Ramon del Rosario Jr, chairman of Makati Business Club. 

“Last year alone, Japan’s improved investments were valued at P69 billion, next only to the Netherlands. In 2012 Japan stood as the Philippines no. 1 trading partner and as the no. 1 market for Philippines exports,” Del Rosario added.

JAPANESE INVASION. Japanese manufacturing companies are lining up to enter the Philippines. Photo by Aya Lowe/Rappler

Tax refund

However, one point of contention that has been straining economic ties between the two countries is the issue over value added tax (VAT) repayment.

“We had a meeting with the business environment sub-committee and discussed the VAT issue. We will be paid back in cash and will be given the schedule of payment,” said Urabe.

Under the law, imported products, particularly machinery and equipment, have a VAT of 12%. However, this amount may be refunded depending on the difference between the output and input costs of the VAT.

The Joint Foreign Chambers released a statement in May expressing concern over the long and tedious process of claiming VAT refunds, which scare investors away. 

The Bureau of Internal Revenue (BIR) has so far issued notice of payment schedule for 390 applications with claims of P2.057 billion. About 49 applications amounting to P60.3 million have been denied due to either late filing or the existence of delinquent accounts. The remaining 80 applications with claims of P252 million are subject to review by the BIR. – Rappler.com

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