The Philippines listed additional investments of P10.5 billion from Japanese wiring harness manufacturers, which are projected to generate 18,650 jobs, the Department of Trade and Industry (DTI) said on Thursday.
The Trade department, along with the Philippine Trade and Investment Center (PTIC) in Tokyo, virtually met with 6 Japanese investors this week to discuss investment opportunities in wiring harness in the Philippines. These include representatives from Sumitomo Wiring Systems Ltd. and Yokowo Co. Ltd.
Commercial Counselor and Special Trade Representative Dita Angara-Mathay, who leads the DTI Field Office in Japan, said that out of the six Japanese firms in attendance, two are new investors and two have confirmed expansion projects.
“The remaining companies are still completing their expansion and diversification plans. The rise of new factories, more high-tech products, and new jobs will not only enhance economic activity in regions outside the NCR [National Capital Region] but also relieve congestion thereat,” Angara-Mathay said.
Trade Secretary Ramon Lopez said it was “encouraging to note that the Philippines is able to attract new business in strategic sectors” despite the ongoing pandemic.
The DTI chief encouraged the Japanese firms to expand their operations in the country given that wiring harness is a major export product.
Last year, the Philippines exported wiring harness valued at $1.886 billion—$857 million or 45.44 percent of which were shipped to Japan, making it the biggest foreign market for the product. This is followed by the United States, South Korea, Canada, and Thailand.
DTI noted that the Philippines is the fourth largest exporter of wiring harnesses in the world, with Lopez stressing that demand for greater fuel efficiency and electric vehicles will bode well for the manufacturers.
“With wiring harness applications expanding beyond the automotive industry to the telecommunications, aerospace, medical fields, and other ICT [information and communications technology] areas, support for upgrading Philippine-based wiring harness operations have become all the more imperative,” he said.
Trade Undersecretary Rafaelita Aldaba, meanwhile, said Japanese investors may avail of incentives under the Corporate Recovery and Tax Incentives for Enterprise (CREATE) Act, which paved the way for the Special Investment Priority Plan (SIPP). SIPP is a list of priority investments that can be given incentives based on CREATE.
“As a prime generator of jobs, provider of support for sectors critical to industrial development, its potential to create value through innovation, and the country’s comparative competitive advantage in global manufacturing and the export market, investment in wiring harness production may qualify as Tier One under CREATE,” Aldaba said.
Qualified industries under CREATE may receive incentives including income tax holiday, special corporate income tax rates or enhanced deductions.
The Fiscal Incentives Review Board—co-chaired by DTI and Department of Finance—has yet to finalize the SIPP and the implementing rules and regulations of CREATE.