Japanese trading giants investing big in Philippines

By Riza Lozada

Japan’s giant trading hous­es or sogo shoshas are again investing big in the Philippines in response to the invitation of President Duterte during his recent three-day official visit to Ja­pan.

Marubeni Corp. leads the pledges for investments in the country, as it commit­ted to raise its infusions into infrastructure and utility projects.

Initial business deals signed between the Philip­pines and Japan during the President’s trip amounted to $1.85 billion, which is ex­pected to generate 250,000 jobs over the years.

Documents provid­ed by Trade and Industry Secretary Ramon Lopez showed that Marubeni plans to invest $3.2 billion in the short term, and $14 billion more in the medi­um-to-long term, in such projects as mass-transport systems, roads, highways, water, and power.

Sumitomo Mitsui Banking Corp., the first for­eign bank granted with a license after the country lib­eralized its banking sector, has committed to continue its expansion in the Philip­pines.

The Japanese External Trade Organization (Jetro) likewise expressed its com­mitment to increase the im­port of products from the Philippines.

Mitsubishi Motors Corp. (MMC) said in a statement that it signed a Letter of Intent (LOI) with the Department of Trade and Industry (DTI) reinforcing its participation in the Com­prehensive Automotive Resurgence Strategy (CARS) Program.

“Receiving approval to participate in the CARS Program from the DTI affirms the over 50 years of contribution to the development of the Philippines automobile industry. It is my hope that MMPC (Mitsubishi Motors Philip­pines Corp.) not only promotes employment in the Philippines but also contributes to the overall development of the economy,” MMC Chairman-President-CEO Osamu Masuko, said.

Japanese carmaker Toyota Motor Corp. reconfirmed its support for the CARS Pro­gram.

Other business deals that were signed during Mr. Duterte’s trip to Japan included: Tsuneishi’s ship reuse center in Negros Oc­cidental and a biomass fuel project; Minebea Mitsumi’s expansion project for optical image stabilizers for smartphone; Ise Foods’ joint venture for a state-of-the-art egg factory; Far­mind’s plan to buy 20 million boxes of Cav­endish bananas; Sumifru Agricultural Devel­opment, Inc., a trader of Cavendish bananas; PUES/E-Vehicle Association for a feasibility study for an electric-vehicle project that will be funded by Japan’s Ministry of Economy, Trade, and Industry; Centro Manufacturing/ Nippon Freuhauf for the production of wing van body seats for trucks; Ayala/Mitsubishi for a joint venture of solar rooftop project; and Bases Conversion and Development Author­ity/Hitatchi/PowerGrid for a feasibility study of Clark Green City’s energy management system, district cooling system, energy storage and distributed energy resources, and total en­ergy network system.

Arriving in Davao City from his Japan trip, Mr. Duterte said Japan would also play an im­portant role in maintaining security and stabil­ity in the West Philippine Sea.

The President said he discussed with Japa­nese Prime Minister Shinzo Abe the enhance­ment of the country’s capabilities in maritime security and stability amid his desire to wean the country away from dependence on US military help.

Mr. Duterte added that he encouraged private businesses in Japan to invest in the Philippines mainly in the manufacturing and trading sectors.

Under the deal with Japanese firm Far­mind, the Philippines expects to regain its dominance in Japan’s banana import market with the signing of a deal to supply as much as P5 billion worth of bananas every year.

Farmind Corp. and the Department of Agriculture (DA) signed an agreement for the supply of 20 million boxes of Cavendish ba­nanas to the Japanese market a year. Mr. Dute­rte witnessed the signing of the supply agree­ment.

Agriculture Secretary Manny Piñol said the deal would mark the start of the develop­ment of about 7,000 hectares of banana farms that Farmind Corp. would like to be located in former conflict areas in the southern Philip­pines.

Piñol said the Farmind Corp. project aims to provide livelihood opportunities for rebel returnees and beneficiaries of the agrarian re­form program to support the President’s peace efforts.

“It is estimated to result in the direct em­ployment of 14,000 farm workers and many more in direct employment in other ancillary services,” he added.

Philippines bananas dominate the Japa­nese market, as the country supplies as much as 90 percent of the total requirements. How­ever, in recent years, bananas from Ecuador have also penetrated Japan.

Currently, the Philippines only holds 75 percent of the banana supply in Japan and this is mainly because the low prices of oil have al­lowed Ecuador to bring its bananas to Japan at a lower transport cost.

“The entry of the Farmind supply con­tract, however, will once again allow the Phil­ippines to dominate the Japan market,” Piñol said.

Mr. Duterte recognized that Japan re­mains the top-trading partner of the country.

He said the Japanese premier agreed that Japan should provide more cheap loans or Of­ficial Development Assistance (ODA) to help the Philippines achieve “inclusive growth.” Japan remains as the top contributor of ODA funds to the country through the Japan Inter­national Cooperation Agency (Jica).

Mr. Duterte added that Abe has vowed to continue to provide support for the Mindanao agenda that aims for just and lasting peace for the country.