Philippine Manufacturing Co. of Murata Inc., one of the largest Japanese electronics companies in the country, put its P40-billion expansion program on hold amid the uncertainty in the grant of tax incentives.
Murata has two manufacturing sites in Laguna and Batangas. Its facility at First Philippine Industrial Park in Tanauan City is considered the largest in Asia.
Philippine Economic Zone Authority director-general Charito Plaza said Murata’s expansion program was supposed to employ an additional 6,000 workers, on top of its current labor pool of 2,984 personnel.
Plaza, who has been opposing the second package of the Tax Reform for Acceleration and Inclusion, disclosed this information after a brief visit to the company’s manufacturing site in Tanauan. Train 2, or the Tax Reform for Attracting Better and High Quality Opportunities bill, aims to modernize the tax incentives granted to investors and reduce the corporate income tax rate from 30 percent to 20 percent.
Foreign investors expressed concern that once passed into law, the Trabaho bill would remove the incentives, such as six-year income tax holiday and 5-percent tax on gross income earned, which they currently enjoy.
“Murata’s P40-billion expansion of new plants and new products was held off, until they have a clearer picture of the effects of Train 2 to foreign investors,” Plaza said.
“Murata management said they’re here in the Philippines because of Peza’s incentives and brand of service, and because of young English speaking Filipino work force,” Plaza said.
Murata established its presence in the Philippines in 2012 with a P7.7-billion capital infusion for a chip monolithic ceramic capacitor inside the First Philippine Industrial Park. PMM, the local unit, produces multilayer ceramic capacitors.
The company, which occupies 24 hectares in the industrial park, plans to add two new buildings to expand its product line.
Murata has annual sales of about P5.65 billion. It has 96 subsidiaries, including 31 in Japan and 66 in other countries.
Murata manufactures 10 types of finished products and exports up to 95 percent of these products to captive markets. Its innovations can be found in a wide range of applications from mobile phones to home appliances, automotive applications to energy management systems, and healthcare devices.