Japan, South Korea push Philippine FDI

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Japanese and South Korean companies have been steadily escaping rising wages and nationalism in China and relocating to the Philippines, contributing to the $1 billion in foreign direct investment (FDI) the country reached during the first eight months of 2012.

According to government officials, the Philippines is becoming more appealing, especially to Japanese and South Korean electronic component makers, for several reasons.

Above all, the cripplingly flood that struck Thailand and the tsunami that devastated Japan in 2011 have propelled manufacturers to rethink production base locations.

Additionally, jingoism brewing in China has led to the boycott of Japanese goods, pressuring businesses to ultimately seek out friendlier markets in the neighborhood.

The Philippines is supportive of the Japanese line especially. The foreign minister of the Southeast Asian archipelago nation recently told the Financial Times that the Philippines would strongly support a rearmed Japan as a “significant balancing factor” over territorial disputes with China.

Stronger relations have been good for business. The solidified confidence from Japanese and South Korean firms for the Philippine business environment has in turn help support bank loan growth, which has risen at 13 to 14 per cent.

Banks in the Philippines are highly liquid and have also issued impressive bonds this year, according to the Philippine Central Bank.

About $9.7 million worth of bonds were sold by the Philippine private sector in recent months while another $83 million were sold by public-sector entities.

The Philippines’ large and young English-speaking work force coupled with the country’s low inflation and continued economic growth also make the destination highly attraction for investors, especially those looking for options other than China.

 

 

 

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Reading Time: 2 minutes

Japanese and South Korean companies have been steadily escaping rising wages and nationalism in China and relocating to the Philippines, contributing to the $1 billion in foreign direct investment (FDI) the country reached during the first eight months of 2012.

Reading Time: 2 minutes

Japanese and South Korean companies have been steadily escaping rising wages and nationalism in China and relocating to the Philippines, contributing to the $1 billion in foreign direct investment (FDI) the country reached during the first eight months of 2012.

According to government officials, the Philippines is becoming more appealing, especially to Japanese and South Korean electronic component makers, for several reasons.

Above all, the cripplingly flood that struck Thailand and the tsunami that devastated Japan in 2011 have propelled manufacturers to rethink production base locations.

Additionally, jingoism brewing in China has led to the boycott of Japanese goods, pressuring businesses to ultimately seek out friendlier markets in the neighborhood.

The Philippines is supportive of the Japanese line especially. The foreign minister of the Southeast Asian archipelago nation recently told the Financial Times that the Philippines would strongly support a rearmed Japan as a “significant balancing factor” over territorial disputes with China.

Stronger relations have been good for business. The solidified confidence from Japanese and South Korean firms for the Philippine business environment has in turn help support bank loan growth, which has risen at 13 to 14 per cent.

Banks in the Philippines are highly liquid and have also issued impressive bonds this year, according to the Philippine Central Bank.

About $9.7 million worth of bonds were sold by the Philippine private sector in recent months while another $83 million were sold by public-sector entities.

The Philippines’ large and young English-speaking work force coupled with the country’s low inflation and continued economic growth also make the destination highly attraction for investors, especially those looking for options other than China.

 

 

 

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