More FDIs from Japan after Marcos visit

President Marcos continued his efforts to promote foreign investments to help accelerate the country’s economic development with a five-day working visit to Japan last week.

Japan is one of the country’s major foreign investors and for decades has been a major trading partner and a source of foreign investments. It has also been the biggest single source of official development assistance to the country.

Japan visit accomplishments. Upon arriving in Manila from the visit, the president reported that his visit was a success, went “according to plan,” as he put it, was even “beyond expectations.”

He reported that the visit yielded some $13 billion in investment pledges that would create 24,000 jobs. He reported specifics in infrastructure loans that covers two major transportation projects amounting to $3 billion to ease commuter traffic in Metro Manila – the North South Commuter Malolos-Tutuban railway project and the Extension of the North-South Commuter railway to Cavite.

Further, and more important, he cited the strengthening of the strategic partnership with Japan “for a new decade of mutual trust, mutual support, and mutual benefit.”

He emphasized this in his report on arrival in Manila: “I had a very fruitful meeting with Prime Minister Kishida Fumio. Founded on shared values and common aspirations for our peoples, we committed to further strengthen the strategic partnership between the Philippines and Japan and map out a transformative future-oriented partnership that is responsive to new developments.”

President Marcos spoke briefly at the Philippine Business Opportunities Forum where hundreds of local companies met with Filipino executives. Here, he said that the Philippines has a great deal to offer to Japanese investors, emphasizing the recent high economic recovery in the country. He quipped to them, “When you think growth, think Philippines.

According to the Department of Trade and Industry, 120 Philippine companies and 1,300 Japanese enterprises composed of 3,472 businessmen registered for meetings held during the Tokyo visit.

During the visit, 35 specific letters of intent between Philippine businessmen and Japanese business leaders were signed covering ventures or reaffirming plans on clean energy projects, highly skilled manufacturing, infrastructure development, and retail. The roster of projects includes new initiatives and expansions of older ventures.

The President also met with the chief executives of Japanese shipping companies and associations that employ almost 32,000 Filipino mariners. The OFWs constitute 70 percent of the marine crew of the Japanese shipowners. The Japanese shipping industry is the second largest maritime industry in the world.

Trade and Industry Secretary Alfredo Pascual, whose department helped to make the preparations for the gatherings with the Japanese counterparts, was asked by accompanying Filipino journalists to elaborate further on the agreements.

His reply was that some of the projects are ready to go, some are already registered with the Board of Investments or with PEZA. Some are being prepared for documentation. Also, if they are already on board, the disbursements of the investments are made over time, not in a single shot.

In short, they are investment commitments that are likely to appear as investment flows to be made in the future. If Japanese private foreign investors are persuaded by the new foreign investment friendly overture by the diplomacy of our newly installed president, then we can expect a bulging of FDI inflows from Japan in the future, at the very least, much better than we traditionally are accustomed to realizing.

Coupled with the added investment inflows suggested by previous investment travels of the President and his economic team if they materialize, that could amount to a pretty sum of new foreign investments to help drive our nation’s economy forward.

A view from Japan. I checked into Japanese media coverage of the Tokyo visit of our president. Two widely circulated newspapers that had long editorials on the visit were the Japan Times and the Asahi Shimbun.

The essence of the editorial commentaries was that the visit of President Marcos bolstered the strategic relationships between Japan and the Philippines. On this count, much was made of the value of the security relations arising from the strategic relationships emphasized in the meeting between Prime Minister Kishida and President Marcos.

They regard the matter of economic relationships as strong and likely to remain so.

I pick up key sentences in the long Japan Times editorial that assign significance to the economic relations:

“(The visit of Marcos) was designed to put meat on the bones of the two countries’ ‘strategic partnership’ turning its potential into reality. Japan has long been a key partner of the Philippines, providing aid and investment, but leaders now seek a more comprehensive relationship – one with a more robust security dimension. They are succeeding….

“Japan has been the leading source of overseas development assistance to the Philippines as well, providing $11.2 billion worth of loans and grants. Not surprisingly, Filipinos have a high opinion of this country: A 2022 poll showed that nearly 80 percent of Filipinos trust Japan, and it is consistently among Filipinos’ most favored international partners.

“Marcos built on that foundation during his trip. He sought to boost infrastructure investments – always a priority – and collaboration on agriculture, defense, digital transformation, healthcare and renewable energy.

“Last month, Marcos visited China and met President Xi Jinping, securing $22.8 billion in investment pledges from Chinese companies. That relationship will remain an integral part of the Philippines economy. Japan cannot supplant it, but it can provide a counterweight or balance to ensure that Beijing does not assume excess weight and to help reduce the Philippines’ dependence on China.

“To be successful, Japan must partner with the Philippines – no matter who is the president – to improve the lives of that country’s citizens. The visit by Marcos marked significant progress in the bilateral relationship. More should follow.”

(To be continued)

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