GMA to Japanese business groups: Invest in RP energy sector

As the nation grappled with a power crisis, President Arroyo invited Japanese business leaders yesterday to invest in the Philippines’ energy sector, particularly in putting up transmission lines of the state-run National Power Corp. (Napocor).

On the third day of her five-day working visit to Japan, the President urged delegates at a forum on energy in Tokyo "to participate in the shaping of the first truly privatized energy market" in the Philippines.

"The country’s privatization efforts present various opportunities for Japanese companies in the transmission, that is, in terms of pure transmission business generation," Mrs. Arroyo told Japanese business leaders.

Her invitation came a day after a massive seven-hour blackout last Tuesday left about 40 million people across Luzon sweltering in the summer heat.

Mrs. Arroyo emphasized her administration’s commitment to reforms in the energy sector, citing the passage of an energy sector reform law last year.

Ironically, the Philippines has an oversupply of electricity. However, the lack of transmission lines left much of the power produced by various power firms that sell their output to Napocor going to waste.

Napocor has been unable to put up additional lines because it is deep in debt.

Although Napocor is still trying to find out what caused last Tuesday’s blackout, officials said the usual cause is a power overload, which leads to an automatic shutdown of transmission lines as a safety precaution – the same way an ordinary house fuse blows up when there is too much electricity.

Meanwhile, Honda Motor Co. plans a P770 million expansion of its Philippine plant, the company’s top executive told Mrs. Arroyo yesterday during their breakfast meeting.

The expansion was announced by Acting Press Secretary Silvestre Afable Jr. during a teleconference with reporters in Manila. He said the President also invited Honda and Toyota Motor Corp., the two biggest automakers of Japan, to set up a completely-built-units (CBU) auto plant in the Philippines.

Mrs. Arroyo met Hiroshi Okuda, Toyota’s chairman, and Katsuro Suzuki, Honda’s managing director, during separate courtesy calls on the third day of her working visit to Japan.

Both executives reacted positively to the President’s invitation and confirmed their intentions to invest further in the Philippines, Afable said.

Toyota Motors has invested P4.6 billion here. Its local subsidiary, Toyota Motor Philippines, currently employs almost 1,500 Philippine workers. Honda, meanwhile, has invested P3.8 billion here and set up seven companies to provide spare parts to the parent company. It employs roughly 1,000 workers.

Afable said the latest investment infusion by Honda is part of the effort on Japanese automakers’ part to increase the exports of manual transmissions from Southeast Asia.

Meanwhile, the Japanese government agency responsible for external trade plans to send a mission here in July to review the quality of Philippine products, said Trade and Industry Secretary Manuel Roxas II. The plan, coupled with Honda’s and Toyota’s affirmations, illustrates Japan’s strong interests to invest in the Philippines, Roxas added.

These developments are positive to the goal of the President’s working visit to Japan, which is to strengthen bilateral economic relations between the two countries.

In a meeting held yesterday, Noboru Hatakeyama, chairman of the Japan External Trade Organization (Jetro), told Mrs. Arroyo that officials from the agency will meet with Philippine manufacturers during the visit and give them an opportunity to exhibit their products.

"This is a good development in the President’s program of inviting foreign investors to the country as well as in promoting Philippine products for exports," said Roxas, who accompanied the President to the meeting.

Hatakeyama also approved the creation of a Japanese business support center in the Philippines, Roxas said. The center will assist Japanese companies in the country, particularly the small and medium enterprises. Jetro has set up a similar center in Singapore and Thailand.

Mrs. Arroyo kept busy yesterday, meeting with several senior Japanese officials and businessmen and delivering a keynote speech during the Energy Forum held at the Hotel Okura.

In the meeting with Japanese Trade and Industry Minister, Takeo Hiranuma, the President agreed to set up a joint working group with Japan to oversee an economic partnership agreement (EPA), an accord similar to the Japan-Singapore EPA signed earlier this year.

"We talked about a broad range of issues, including Japan relations and the proposal to have closer economic cooperation with the EPA between the two countries," said Roxas, who also attended the meeting.

"We will set up a task force or working group between the METI (Ministry of Economy, Trade and Industry) here and the DTI (Department of Trade and Industry) on the steps that should be taken," the secretary added.

The Japan-Singapore EPA calls for the closer economic and trade cooperation between the two countries, bilateral assistance for human resource development and tourism, as well as the exchange of science and technology, information and communications technology. However, the proposed Philippine EPA with Japan will be "stronger and more focused than the existing broad economic cooperation," Secretary Afable told reporters in Manila during a teleconference.

"We find the EPA an attractive initiative that could involve not just closer economic cooperation with ASEAN (the Association of Southeast Asian Nations) to ensure the security of the region," Mrs. Arroyo said after a meeting with Japanese Prime Minister Junichiro Koizumi.

"It could involve not just trade agreements, but also other sectors of the economy like science and technology, tourism, human resource development and investment promotion," she added.