China, Japan investments up, Korea down

MANILA, Philippines — Korean investments in the Philippines are shrinking, while Chinese investors are making their big comeback and the Japanese continue to see the country as an investment destination, data from two of the country’s largest investment promotion agencies showed.

Investment pledges approved by both the Philippine Economic Zone Authority (PEZA) and the Board of Investments (BOI) from China nearly quadrupled for the January to October period, surging to P2.02 billion from P546.05 million in the same period in 2016.

Renewing the country’s ties with China has been a priority of the Duterte administration since day one and its efforts are bearing fruit based on the investment data from BOI and PEZA as of end-October.

Japanese investors have sustained their confidence in the Philippines as their investment pledges nearly doubled in the 10-month period of 2017 to P27.15 billion from P14.07 billion last year.

Japan Chamber of Commerce and Industry of the Philippines president Hiroshi Shiraishi said various factors such as labor cost, easy communication in English, competitive incentives, and rules of the domestic market continue to draw Japanese investors to the country. 

“Major existing Japanese companies in the Philippines have continued to expand capacities of their factories. In reality, Japanese expansion has been very, very aggressive in expanding in addition to the new foreign direct investments from Japan,” Shiraishi said.

Investments coming from Korea to the Philippines, meanwhile, are heading towards the opposite direction compared to their Asian counterparts.

“Recently, South Korea is a bit behind compared with China and Japan. As head of the Korean Chamber, I do hope for more investors and investments from Korea as the Philippine  economy is positive and is an emerging market,” Korean Chamber of Commerce of the Philippines president Ho Ik Lee said. 

Data from PEZA and BOI showed that investments approved from Korean investors in the 10 months ending October plunged significantly to P793.05 million from P8.11 billion last year.

Lee earlier said many Korean firms have been complaining about the higher cost of doing business as well as lack of incentives in the country, prompting some of them to pack up and leave the country for Vietnam where they see lower costs and an easier way of doing business.

Last February, the Korean business community in the Philippines called on the government to double its efforts in ensuring the safety of Korean nationals in the country, following reports that high-ranking police were behind the kidnap-slay of Korean businessman Jee Ick-joo at police headquarters in Camp Crame last year.

Meanwhile, US investments to the Philippines have remained steady amid President Duterte previous tirades and US President Donald Trump’s “America first” policy.

Combined PEZA and BOI approved investments from the US stood at P8.006 billion in the first 10 months of the year, slightly lower than the P8.053 billion registered in the same period in 2016.

Broken down, investments approved from China by PEZA alone soared 980 percent year-on-year to P1.48 billion, while that from the BOI grew 32 percent year-on-year to P540.18 million.

PEZA-approved projects from Japan jumped 214 percent year-on-year to P22.74 billion, while those from the BOI declined 35.43 percent to P4.41 billion.

Korean investments from PEZA and BOI, meanwhile, registered a 53.41 percent and 99.87 percent drop, respectively, to P784.65 million and P8.4 million.