Phl should maximize PJEPA benefits – PCCI

MANILA, Philippines - Despite having an economic partnership agreement with Japan, the Philippines has not maximized the benefits of the deal as there has been no significant increase in investments from Japanese firms amid concerns over high utility and transport costs as well as policy changes, the Philippine Chamber of Commerce and Industry (PCCI) said.

“At the moment, we are just scratching the surface as far as PJEPA (Philippines-Japan Economic Partnership Agreement) is concerned,” PCCI vice chairman Donald Dee said during the seminar on bilateral deal organized by the business group with the Japan External Trade Organization.

He said that while the PJEPA is in place, the country has not seen a significant increase in Japanese investments given the high power costs here.

“For Japanese manufacturing firms planning to invest here, they are looking at utility costs. We should make sure energy and water costs are competitive,” he said.

Apart from the high utility costs, Japanese firms planning to invest here also have concerns on the huge logistics costs due to the lack of infrastructure.

Dee said the country needs to spend more for necessary infrastructure such as seaports, highways, and airports to improve connectivity throughout the archipelago.

In line with the push for government to invest more on infrastructure, Dee said the PCCI is set to meet with Trade secretary Gregory Domingo next month to discuss the Association of Southeast Asian Nations roll-on/roll-off system which would connect the Philippines to other countries in the region.

Dee said changes in government policies likewise prevent Japanese investments from entering the country.

“These are things we must put more emphasis on as we go forward if we want to attract more investments,” he said.

As for local firms that intend to maximize the benefits of the PJEPA by being able to ship their products to Japan, he said there is a need for local firms to focus on improving the quality of their goods given the high standards imposed by the Japanese.

The PJEPA, which came into effect in 2008, seeks to strengthen the economic relations of the two countries. It covers free flow of trade in goods, services, persons and capital.

The government is currently undertaking a review of the PJEPA to see how it could make trade policies more responsive to the country’s needs.

According to the National Statistical Coordination Board, Japan was the main source of foreign direct investments in the January to September period last year, committing P30.1 billion or 35 percent of total applications received and approved by investment promotion agencies.