Dec 172014

MANILA, Philippines–Japanese firms operating in the Philippines are bullish of their prospects for next year as more than half of those recently polled by the Japan External Trade Organization (Jetro) have expressed their intention to further expand their businesses in the country.

The latest survey of Jetro also showed that about 71 percent of the respondents expect to post a “surplus in their operating profits” in the Philippines this year.

This was based on Jetro’s 2014 Survey on Business Conditions of Japanese-Affiliated Firms in Asia and Oceania, which was conducted between October and November this year. It covered 4,767 Japanese-affiliated firms operating in 20 countries and regions in Asia and Oceania, including the Philippines.

In a statement, Jetro noted that the number of Japanese-affiliated firms in China that were planning to expand dropped below 50 percent for the first time since the survey began in 1998. In contrast, about 60 percent of the Japanese firms operating in the Asean said they would expand over the next one to two years. In countries like Cambodia, India and Bangladesh, there was expression of interest to expand business, marking a high response rate more than 70 percent.

“The proportion in the Asean exceeded that of China in 2012, and since then, the difference has widened to 13.8 points. In the Philippines, the rate has risen to 58.7 percent since 2009. High response rates were seen in emerging countries such as Cambodia (79.5 percent), India (78.2 percent) and Bangladesh (71.1 percent).

Survey results further showed that 63.9 percent of Japanese firms operating in Asia and Oceania are expecting their operating profits for 2014 to be a “surplus.” This approximates the level in the previous year (64.6 percent).

Of the countries where these firms are located, Pakistan ranked the highest in terms of profit surplus expectations at 84.2 percent; followed by Taiwan (83.8 percent); Korea (76.2 percent); Australia (71.5 percent); Hong Kong/Macau (71.5 percent) and the Philippines (71.2 percent).

The rate, however, was relatively low in Myanmar (8 percent), Laos (23.1 percent) and Cambodia (25.6 percent).

Jetro also reported that one of the more pressing issue that came out in the survey was the continued increase in wages.

“Increasing wages was the most commonly selected problem, with 72.2 percent of respondents saying so. It accounted for more than 80 percent in China, Indonesia and Cambodia… A double-digit wage increase was seen in seven countries such as Indonesia, Pakistan, Myanmar, Cambodia, India, Bangladesh and Sri Lanka, compared to the average rate of increase last year. In four countries such as Indonesia, Pakistan, Cambodia and India, the double-digit increase is expected to continue in 2015,” Jetro said in a report.

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