Gov’t considers ecozone for SMEs

MANILA, Philippines - The government is open to a proposal of Japanese businesses to set up an economic zone for small and medium enterprises (SMEs) allowing local firms to supply to bigger companies and become part of the global value chain.

Trade Undersecretary Ponciano Manalo Jr. told reporters the government would be looking at how a special economic zone could be put up for SMEs as proposed by the business delegation organized by Japan’s largest business organization the Japan Chamber of Commerce and Industry (JCCI), during a dialogue with President Aquino and other government officials last week.

JCCI chairman Akio Mimura earlier said the group proposed the creation of an economic zone as well as a rental factory for SMEs to the Philippine government to support the growth of small businesses.

“SMEs are not like major corporations. They are vulnerable to fluctuations and changes in outside environment and therefore, they are hesitant in making foreign investments,” he said.

While the proposal has not been firmed up, Manalo said the Department of Trade and Industry would want to meet with the Philippine Economic Zone Authority as well as the Japan External Trade Organization to see how to proceed with the proposal.

“Nothing is definite but it is an idea that will help develop an industrial zone for SMEs for Japanese and Philippine investors together. The beauty of it is, SMEs will supply the big industrial companies that are located or locating here… If we want Philippines to be part of Japanese global value chain, that is how we will get (to it) little by little,” he said.

The proposal is seen to benefit not just Philippine SMEs but Japan’s as well as Prime Minister Shinzo Abe is encouraging their SMEs to invest abroad.

Manalo said the creation of economic zones for SMEs will likewise support the government’s goal of promoting the resurgence of the manufacturing sector which is seen to generate jobs and make economic growth inclusive.

As the government is moving to attract more investments in manufacturing, he encouraged the members of the Japanese business mission to consider opportunities particularly in motor vehicles as well as shipbuilding.

Opportunities are also available in aerospace as the Philippine firms can supply to Japanese companies with first-tier aircraft parts.