Some Japanese firms in Philippines mull to expand business amid pandemic - JETRO
About a third of Japanese companies in the Philippines are planning to expand their business this year and next year amid the coronavirus pandemic, according to Japan External Trade Organization (JETRO).
In the 2020 JETRO Survey on Business Conditions of Japanese Companies in Asia and Oceania, Takashi Ishihara, executive director of JETRO-Manila, said out of 133 Japanese companies in the Philippines that responded in the survey, some 60 percent of them expressed belief that their operating profit this year will be better than 2020.
"One third of respondents are planning to expand their business, while 57 percent expect the 'status quo' and only eight percent consider downsizing," JETRO said.
While some companies considered cutting the number of their employees last year, for this year, JETRO said about a third of the respondents said they will employ more local staff as most of them believe that the economy will recover.
"Two-third of respondents believe that economic recovery will be realized in 2021. Some 80 percent of respondents think their market size after COVID-19 would be same or slightly smaller than that before COVID-19," JETRO said.
It cited that almost half of the Japanese firms in the country revised their business strategies or models, such as the promotion of work from home or telework due to pandemic.
Some Japanese manufacturers have also diversified their production base in many countries so they could strengthen their global supply chain, it added.
In the same survey, JETRO also noted some "advantages and challenges" in the Philippines as an investment destination for the Japanese companies.
It cited that "reasonable compensation for workers and favorable tax incentives" as of September 2020 were "superior" to neighboring countries.
However, JETRO said many respondents also pointed out "negative factors" for the Philippines as an investment destination.
The negative factors include unstable politics and society; problems caused by insufficient infrastructure, such as expensive electric power, frequent blackout, chronic traffic congestions, unstable and slow telecommunications, and poor port facilities; and difficulties on local procurement of parts and raw materials.
The respondents also cited low accumulation level of business customers; concerns about safety and security; inconsistent implementation of administrative rules by each official; complicated procedures for obtaining permits and tax practices; and natural disasters.
The annual survey was conducted in August to September last year using questionnaire sheet. Of the 133 Japanese companies that responded in the survey, 59 were manufacturers and 74 were non-manufacturers. Celerina Monte/DMS
