DTI asks 6 Japan firms to expand wiring harness production in PH

The Department of Trade and Industry encouraged six Japanese investors to expand their wiring harness operations, given the fresh incentives made available by the Corporate Recovery and Tax Incentives for Enterprises Act.

“Wire harness is one of our biggest exports, and for 2020 the Philippines exported $1.886 billion worth of wire harnesses to the world,” Trade Secretary Ramon Lopez said during a virtual round table briefing organized by Philippine Trade and Investment Center in Tokyo.

Wire harness exports to Japan reached $857 million last year, or about 45.44 percent of the Philippines’ total wire harness exports. Japan was the Philippines biggest market for wire harnesses, followed by the US, South Korea, Canada and Thailand.

Among the Japanese companies in the meeting, two are new investors while two confirmed expansion plans.

Lopez said demand for greater fuel efficiency and electric vehicles would continue to fuel the growth of automotive wiring harness manufacturing in the future.

“With wiring harness applications expanding beyond the automotive industry to the telecommunications, aerospace, medical fields and other ICT areas, support for upgrading Philippine-based wiring harness operations have become all the more imperative,” he said.

The automotive wiring harness market is expected to surpass $93 billion by 2023. The Philippines is the fourth largest exporter of wiring harnesses in the world.

“As a prime generator of jobs, provider of support for sectors critical to industrial development, its potential to create value through innovation, and the country’s comparative competitive advantage in global manufacturing and the export market, investment in wiring harness production may qualify as Tier One under CREATE,” said Trade Undersecretary Rafaelita Aldaba.

Under the modernized incentives system in CREATE, qualified industries may avail of incentives such as income tax holiday, special corporate income tax rates or enhanced deductions.

Export-oriented industries that qualify under Tier I may avail of ten years of ED/SCIT. This is in addition to four years of ITH for industries located In the National Capital Region, five years of ITH for those in metropolitan areas or areas contiguous and adjacent to NCR, and six years of ITH for all other areas.

A longer transition period is given to industries currently granted incentives, making the incentives more performance-based, focused and time-bound.

“Confidence building sits as one of the main reasons why this roundtable was organized. By initiating dialogues and addressing issues in a pro-active manner, we are sending a clear message of our unwavering commitment towards the continued and smooth operations of Japanese investors’ operations in the country, even amidst an environment of great uncertainty. The Philippines will work with Japan in the non-disruption of the global supply chain for key industries,” Lopez said.

Topics: DTI , Philippines , Japanese companies , wiring harness , investments , exports
COMMENT DISCLAIMER: Reader comments posted on this Web site are not in any way endorsed by Manila Standard. Comments are views by readers who exercise their right to free expression and they do not necessarily represent or reflect the position or viewpoint of While reserving this publication’s right to delete comments that are deemed offensive, indecent or inconsistent with Manila Standard editorial standards, Manila Standard may not be held liable for any false information posted by readers in this comments section.