MANILA, Philippines – Most Japanese companies with operations in Asia and Oceania including the Philippines intend to expand their business in the next two years, according to the Japan External Trade Organization (JETRO).
The JETRO’s survey of Japanese-affiliated companies in Asia and Oceania for December 2013 showed that 58.1 percent of 148 Japanese firms based in the Philippines plan to expand their business in the next two years.
Meanwhile, 38.5 percent want to maintain the existing level of business and 3.4 percent will reduce their operations here.
For the whole of Asia and Oceania, the survey showed that 59.8 percent of the 4,536 Japanese firms are planning to expand in the next two years, while 36.3 percent will maintain current level of business and 3.9 percent will cut their operations.
“The most commonly cited reason for business expansion was a ‘sales increase’ at 85.4 percent, followed by ‘high growth potential’ at 46.8 percent,” JETRO said.
In the Philippines, it noted that the proportion of firms responding “easy to secure labor force” as a reason for the planned expansion, was relatively high at 12.8 percent.
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In terms of sales outlook, Japanese companies with operations in the Philippines are more optimistic of growth in profits in 2014 than this year.
The survey noted that 46.7 percent of Japanese firms in the Philippines expect their profits to rise this year compared to 2012, while 51 percent see their income growing next year over 2013.
This was in line with the sentiment of most Japanese firms in the Asia and Oceania region, with 43 percent predicting that their earnings will grow this year from 2012, and 50.6 percent expecting profits to go up next year from its level in 2013.
When asked to identify the problems or challenges in doing business, Japanese firms based in the Philippines cited the lack of employee performance or employee awareness among local staff as the top concern.
This was followed by difficulty in local procurement of raw materials and parts, quality of employees, volatility of local currency’s exchange rate against the US dollar and wage increase.
The top five problems common to Japanese firms in the whole of Asia and Oceania are wage increase, growing market shares of competitors, lack of employee performance or employee awareness among local staff, qualify of employees and difficulty in quality control.
The survey, which was conducted between Oct. 8 abd Nov.15 of this year, is intended to understand the business activities of Japanese-affiliated companies in Asia and Oceania.
Aside from the Philippines, the survey covered firms in Northeast Asia (China, Korea, Hong Kong or Macau and Taiwan), Association of Southeast Asian Nations (Thailand, Vietnam, Singapore, Malaysia, Indonesia, Cambodia, Laos and Myanmar), Southwest Asia (India, Bangladesh, Sri Lanka and Pakistan), and Oceania (Australia and New Zealand).
