Japanese investors adopted a wait-and-see stance in the Philippines, pending the rationalization of tax incentives under the second package of the Tax Reform for Acceleration and Inclusion law.
MUFG Bank Manila Branch general manager and country head Tatsudo Ishida said Japanese investors were waiting for the finalization of TRAIN 2, before making investment decisions in economic zones.
“The number of Japanese companies in economic zones is decreasing a little bit because they are waiting for the discussion on TRAIN 2. They are on wait-and-see for a while,” Ishida said.
“But existing companies in economic zones are very profitable, stable and are doing very well. Existing companies are very good and new investors are just waiting. That is the general stance for now,” he said.
Ishida said it was important for the Philippines to remain attractive versus other markets in the region to attract Japanese investments.
The second package of the tax reform program aims to reduce the corporate income tax paid by some 95 percent of businesses while rationalizing the fiscal incentives for deserving recipients that will contribute to national development and help generate pro-poor investments and jobs. The Philippine Economic Zone Authority currently provides tax holidays to locators in accredited economic zones.
Security bank and MUFG Bank, Japan’s largest bank, on Wednesday, opened the 2nd Business Matching Fair between Japanese and Filipino businesses.
Security Bank president Alfonso Salcedo Jr. said both parties arranged a total of 224 business collaboration meetings to provide clients a venue to expand their network and customer base.
Salcedo said Japanese businesses were still bullish on the country’s high economic growth.
“Investors generally see the Philippines’ strong household spending, strong labor force and the so-called ‘demographic sweet spot’ as drivers for more foreign direct investments. Security Bank and MUFG are optimistic that businesses can capitalize on this positive economic outlook through the Business Matching Fair,” Salcedo said.
The country’s growing consumer market and the rising purchasing of the power of Filipinos encourage local businesses to expand their portfolios and offer Japanese branded goods, he said.
Japanese consumers are also impressed with the quality and standard of the products from the agriculture and fisheries sector in the Philippines.
“Our young and growing population is a key factor for Japanese businesses. Investors are looking for long-term investments that will allow them to capture some of the country’s demographic dividend,” Salcedo said.
MUFG’s head of financial solutions group Makoto Kobayashi said the second business matching event reaffirmed the commitment by MUFG and SBC towards working together to contribute to the success of both banks and the long-term development of the Philippine economy.