Japan, South Korea push Philippine FDI

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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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...

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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2 COMMENTS

  1. I have been meeting a lot of people in the government in Philippines and they need to take advantage now of promoting this country as there are a few countries in the world that can offer such high growth rates and returns. I agree with Joseph that countries need to be more open and transparent in certain sectors while still maintaining control of those that are deemed to be of national interest such as agriculture like we see in the US; Europe and other regions in the world!!!

  2. If the Philippines wants to reach the $50-100 billion FDI inflow level of Singapore that is necessary to stimulate our economy with more job opportunities at home, the Aquino Administration should do this first through a constitutional amendment:

    Abolish the 60/40 equity restrictions (Article XII, Sections 2, 10-11; Article XIV, Section 4; Article XV, Section 11) from the 1987 constitution against foreign individuals or corporations who wishes to set-up their businesses anywhere in our country and allow them to invest 100% from their own capital and own it what they invested in order to lure more foreign investors to invest and stay in our country that will provide jobs to millions of unemployed Filipinos at home as much as possible without constitutional barriers.

    Foreign equity ownership by economic sector should be like this:

    Mining – 100%.
    Oil and gas – 100%.
    Agriculture – 100%.
    Forestry – 100%.
    Light manufacturing – 100%.
    Food products manufacturing – 100%.
    Pharmaceutical manufacturing – 100%.
    Publishing – 100%.
    Fixed-line infrastructure – 100%.
    Fixed-line telephony services – 100%.
    Wireless/mobile infrastructure – 100%.
    Wireless/mobile services – 100%.
    Power distribution – 100%.
    Power generation (biomass) – 100%.
    Power generation (coal) – 100%.
    Power generation (hydro) – 100%.
    Power generation (nuclear) – 100%.
    Power generation (solar) – 100%.
    Power generation (wind) – 100%.
    Power transmission – 100%.
    Banking – 100%.
    Insurance – 100%.
    Airport operation – 100%.
    Domestic air – 100%.
    International air – 100%.
    Domestic shipping – 100%.
    International shipping – 100%.
    Advertising – 100%.
    Magazine – 100%.
    Newspaper – 100%.
    Radio broadcasting – 100%.
    Television broadcasting – 100%.
    Construction – 100%.
    Retail distribution services – 100%.
    Tourism – 100%.
    Education – 100%.
    Health care – 100%.
    Waste management – 100%.

    To those who say that if we will allow foreigners to own 100% of a businesses they invested or owning a piece of land, we will become foreigners in our own land is just a fear mongering tactics by coward and freeloading leftists and ultra nationalists elements of our country.

    By using their appeal to fear, Hong Kong, Japan, Singapore, South Korea, and Taiwan should have been controlled economically and politically by the United States and the European Union but instead, their respective economies caught up the US or EU GDP per capita within a generation and therefore they became a developed economy status.

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