TOKYO, Japan – After back-to-back meetings with Japan’s top executives, President Ferdinand Marcos Jr. capped an economic forum on Friday, February 11, with a pitch that his administration would clear the path for Japanese businesses to invest heavily in the Philippines.

Marcos made the statement in a speech delivered at the Philippines Business Opportunities Forum, where hundreds of local companies gathered to mingle with Filipino business executives in town for the President’s official visit to the country.

“The Philippines has a great deal more to offer Japanese investors,” he said.

Marcos earlier branded as “essential” his trip to Japan, one of only three strategic partners of the Philippines, along with Vietnam and the United States. Japan is also the Philippines’ major economic partner, standing as one of its largest sources of trade, investment, and official development assistance.

He listed three reasons why Japanese businesses should continue to invest in the Philippines, including its growth, efforts to pass legislation to facilitate foreign investment, and infrastructure plan.

The Philippines posted a 7.6% gross domestic product in 2022, making it the fastest in Asia, followed by Vietnam and China. Marcos also boasted about the Philippines’ young workforce, whose ability to speak English and trainability “complemented Japan’s development strategy.”

With inflation threatening growth, Marcos’ economic managers said addressing elevating prices was their “top priority.” (READ: PH inflation blows past expectations, soars to 8.7% in January 2023)

Marcos also sought to banner new legislation passed to attract foreign investment. This included amendments in the Public Service Act, which allowed full foreign ownership in public services like telecommunications, shipping, railways, and expressways; and in the Retail Trade Liberalization law which reduced the paid-up capital required of foreign retailers to set up shop in the country.

“With the efforts we have made towards maintaining a sound macroeconomic profile, providing business-enabling policies, and investing in big-ticket infrastructure projects, I hope we are sending the clear message that the Philippines is open for business and that the Philippines means business,” Marcos said.

“When you think growth, think Philippines,” he added.

Japanese concerns

While in town, Marcos officials said that aside from attracting foreign investments, his meetings with Japanese businessmen aimed to gather feedback on doing business in the Philippines.

Among concerns shared by Japanese companies were the need to address value added tax refunds, and gaps in logistics and infrastructure requirements.

In response, Marcos told Japanese executives, “We are designing our efforts to encourage you to stay.” The Philippine leader also promised to set up a “Green Lane” where processing of permits and licenses would be streamlined for completion in 3 to 20 days.

Much is riding on the promise. Earlier in the day, 35 letters of intent were signed between Japanese firms and Philippine entities for potential projects that could see Japanese investment in the expansion of manufacturing facilities and construction of residential and commercial spaces, as well as in transportation.

Though not all new deals, the roster of deals showed a wide range of Japanese investments in the country, spanning industries such as retail and housing to semiconductors, vehicle production, and railways, among others.

The Philippines and Japan have long established trade relations over decades. As of 2022, Japan remained the Philippines second largest trading partner, third largest export market, and second source of imports.

‘Tsunami of interest’

Marcos’ Japan trip also drew one of the largest business delegations in his presidential trip – 114 Filipino businessmen flew to Tokyo for talks with their counterparts. Among tycoons spotted in meetings with the President were Ramon Ang, Jaime Zobel de Ayala, Manuel V. Pangilinan, Edgar Sia, and Manny Villar, among other prominent businessmen.

In an interview with reporters, Speaker Martin Romualdez, a cousin of the President, said the Philippine leader was “thrilled” with prospective investments signed during his official visit.

“There’s a tsunami of interest…not just from existing Japanese investors and businesses but even new ones,” he said.

Presidential overseas trips involving meetings with potential foreign investors usually lead to many investment pledges and expressions of interest, but there is a long process for such interest to be formalized into actual investments. Marcos himself said this in a media interview in Davos, Switzerland, where he attended the World Economic Forum and pitched the proposed Maharlika Investment Fund.

Romualdez also continued his push to amend the 1987 Constitution, this time arguing it was the “last piece of the puzzle” in attracting foreign investments for the Philippines.  

“We will see how we can make our constitution more open and less restrictive because we feel that that is the final piece of the puzzle to bring about a better economic environment, a more open one, to be more competitive,” he said. 

Economic experts have been divided on the need to amend or revise the Constitution in order to relax restrictions on foreign investments. Proponents mostly said changes were necessary to attract foreign investment, while others argued that existing laws were already liberal enough for foreign business to operate in the Philippines. – Rappler.com