Around 200 Japanese companies announced intention to transfer operations from China to the Philippines. Lower labor costs and governmental incentives will favor Pinoys against its giant neighbor.
In the beginning of this month, around 200 Japanese firms decided to relocate their bases from China to the Philippines. The news coincides with the 4-day visit of President Benigno Aquino to Japan where he spoke to businessmen at the Philippine Investment Forum: “Today, I tell you: there is no better time to set up shop in the country”, he said during his speech. Many companies showed interest in bringing manufactures to the Philippines and even signed letters of intent to apply for a PEZA accreditation.
The number of companies from Japan deciding to move operations from China to Philippines is increasing every year. Those companies have been facing difficulties in dealing with the increase of labor costs and employees’ strikes, added to a decline of the Chinese economic growth. Over the past five years, minimum wage china has doubled in China. This scenario has made Japanese firms decide to shut down factories with thousands of workers in China and look for a more favorable environment. And the Philippines is definitely taking advantage of its neighbor tough situation.
Japan has been one of the most consistent trade partners of the Philippines, amounting USD 19 billion on two-way trade only in 2014. Some of the biggest companies established in the Philippines are: Shimano, Bandai, Murata Manufacturing Company Limited, Fujifilm Corporation and Cemedine Philippines Corporation.
Also, Canon Incorporated, Seiko Epson Corp, Funai Electric Company limited and Biotech Japan Corporation have shown great interest in setting up or expand operations in the country.
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