Loan, investment pledges for PH to attain upper middle income status
Tokyo—Japan pledged 600 billion yen (about P250 billion) in official development assistance and private sector investment to the Philippines on Thursday, as it vowed to provide “dynamic support” in helping its “long-time ally” attain Upper Middle Income Country (UMIC) status by 2025.
Japanese Prime Minister Fumio Kishida announced this in a joint press conference with President Ferdinand Marcos Jr. as he vowed to support the administration of the latter in a wide range of areas of cooperation.
Earlier in the day, Mr. Marcos secured billions of pesos worth ofinvestment pledges from leading Japanese semiconductor and electronics companies on Thursday, citing the need to “revitalize” business partnerships that had gone dormant during the pandemic.
The President’s economic team said the investment pledges could translate to more than 10,000 jobs.
Kishida said Japan’s aid will be achieved through “active contribution of the ODA and private-sector investment of JPY 600 billion in Japanese Fiscal Years 2022–2023.”
The leaders also reaffirmed their “distinct, continued commitment” to facilitating the “steady implementation” of ongoing and future economic cooperation projects through the High Level Joint Committee on Infrastructure Development and Economic Cooperation toward the Philippines’ attainment of UMIC status and beyond.
The President said he and the Japanese leader had a “deeply engaging bilateral meeting” covering the full range of Philippines-Japan bilateral relations.
“And after our meeting, I can confidently say that our Strategic Partnership is stronger than ever as we navigate, together, the rough waters buffeting our region,” the President said.
“The future of our relationship remains full of promise, as we continue to deepen and expand our engagements across a wide range of mutually beneficial cooperation,” Mr. Marcos added.
Kishida also expressed Japan’s intention to contribute to the development of quality transport infrastructure in the PH in light of the “Build, Better, More” program of the Marcos administration, as well as equitable regional development in the Philippines, including Mindanao.
The Japanese premier also expressed support for the President’s priority agenda to maintain the competitiveness of Philippine agriculture and to achieve food security, while increasing farm productivity, efficiency, and farmers’ income.
The two leaders welcomed the signing of a memorandum of cooperation (MOC) that provides a framework for agricultural cooperation, such as the establishment of the Joint Committee on Agriculture, exchanges on agricultural and rural development policies, cooperation in resilient and sustainable agriculture and food systems, smart technology, and strengthening food value chain, among others.
“Philippines is Japan’s neighbor across the ocean and is a strategic partner sharing fundamental values. Today, discussion was held with President Marcos on bilateral cooperation on economy, security anddefense, and people-to-people exchange, and deepening of cooperation in wide-ranging areas were strongly affirmed,” PM Kishida said.
At a roundtable with Japanese semiconductor and electronics companies, the President said the Philippines aspires to become “hubs of excellence” for sectors in which it has a natural competitive advantage.
“We want the country to attain the status as a regional hub for printers, wiring harnesses, and other electronic goods,” the President said.
“We consider your operations significant. You are a prime generator of jobs. You provide support for sectors critical to industrial development and you carry with you the promise to create value through innovation in global manufacturing around the world,” Marcos said.
He said the country’s base of engineers, strong workforce, entrenched network of leading Japanese companies, and demonstrated history of success in the information technology services sectors offered the promise of future expansion.
“With the automotive industry moving toward electric vehicles and autonomous driving and the printer industry facing challenges related to digitalization and automation, we hope to see you recruit our talented human resources in your R&D activities,” he said.
Among those present in the meeting were top executives of Japan Aviation Electronics Industry, Ltd.; Yazaki Corp.; Yokowo Manufacturing of the Philippines; Sumitomo Electric Industries, Ltd.;
Brother Industries, Ltd.; IBIDEN Co., Ltd.; Seiko Epson Corp.; NIDEC-SHIMPO Corp.; and TDK Corp.
In 2021, the Philippines was the fourth largest exporter of wiring harnesses in the world after Mexico, China, and Romania.
The Philippines is also one of the lowest cost producers of wiring harnesses in the world, based on exported value and quantity.
This trend has been building over a 20-year period where wiring harness exports from 2001 to 2021 grew at a steady pace of 9 percent a year.
In his speech before the Japanese companies, the President said his administration was speeding up an already “robust and aggressive” infrastructure buildup.
The President assured Japanese investors that the government will try to address the problems of logistics, which they mentioned during previous meetings.
The President also underscored the need to pursue an investment-led export growth strategy for the country’s economic agenda.
“Just like Japan, we want to strengthen and empower our small and medium-sized enterprises so they can transform into true engines of growth,” he said. “They are the heart of our communities. And most importantly, we intend to grow the position of the country as an industrial and service hub in the region through the establishment of anchor locators such as yourselves, who we hope will stimulate development to attract tier 1 to tier 3 suppliers,” President Marcos said.
“This will help us create an efficient and expansive supply chain. Wehave listened to your concerns and your issues, and we intend to respond to these challenges with a whole-of-government approach,” he said.
On Wednesday night, the President underscored the need for the Philippines and Japan to “revitalize” business partnerships that were made somewhat “dormant” by the COVID-19 pandemic, saying this would contribute to the growth of both their economies.
He made this remark during a dinner meeting with executives of Mitsui & Co. and Metro Pacific Investments Corporation (MPIC) just after his arrival in Tokyo.
On its official Facebook account, state-run Radio Television Malacañang (RTVM) showed video footage of Marcos along with Mitsui and MPIC executives like Mitsui & Co. chief executive officer Kenichi Hori and MPIC chairperson Manny Pangilinan.
“The partnership between not only Mitsui but the whole of Japan andthe Philippines has been a long-standing one. We can point to so manyof the developments that happened in the Philippines with the assistance of the different Japanese funding agencies and our government-to-government (G2G) arrangements and commercial arrangements, and these have been to the benefit of both our countries,” Marcos said.
He pointed out that the partnerships need to be revitalized after being “somewhat dormant” during the lockdowns of the pandemic.
Aside from Pangilinan, other business leaders who are part of the country’s delegation were also present like San Miguel Corp.’s Ramon Ang and Ayala Corp’s Jaime Augusto Zobel de Ayala.
Marcos is on a five-day official trip to Japan to strengthen Manila and Tokyo’s collaboration in a wide range of areas, including agriculture, renewable energy, digital transformation, defense and infrastructure.
Marcos was accompanied by First Lady Liza Araneta-Marcos along with several key government officials including Senate President Juan Miguel Zubiri, House Speaker Martin Romualdez and former president and now Senior Deputy Speaker Gloria Macapagal-Arroyo.
In his departure before leaving Manila, Marcos said he will be cultivating collaboration in areas “where future synergies and complementary interests converge with those of Japan.”
Marcos’ schedule will include a meeting with Japanese Prime Minister Fumio Kishida and an audience with Emperor Naruhito as well as meetings with Japan’s business leaders to promote trade and investment opportunities in the Philippines.
In a roundtable with tourism stakeholders in Tokyo, Marcos invited Japanese students to study English in the Philippines.
Tourism contributed 12.9 percent, or close to 13 percent, of the country’s gross domestic product (GDP) before the COVID-19 pandemic.
“With this in mind, this government has set the direction to harness the development of tourism in key tourism destinations. Through this, we will make sure that hard and soft infrastructure are well-developed… and readily accessible for tourists and locals alike,” the President said.
“We are banking on this potential to reshape the industry to be one of the key economic drivers of the country. We are well on our way to recovery, this I assure you, with more than 2.65 million foreign visitors we have welcomed last year, that’s exceeding the initial target of 1.7 million,” the President said.
Marcos said the country is “open and ready to welcome more Japanese onto our shores.”
As of Jan. 30, Japan ranks sixth among the country’s foreign visitors, Mr. Marcos said.
Romualdez, who is part of the President’s delegation, expressed optimism that the working visit will bring more investments into the Philippines.
“The President is really working hard to promote the Philippines to Japanese investors and businesses. And with the warm reception he is receiving, I am confident that he would achieve more significant gains in the few remaining days of his working visit to Japan,” Romualdez said.