PHILIPPINE NEWS SERVICE — The Philippines hopes to generate at least P55 billion worth of new investments annually from Japan with the ratification of the economic partnership agreement between the two countries.
Trade Undersecretary Elmer Hernandez said the investments would come from automotive parts and components sectors, textile and food processing within four years from the signing of the Japan-Philippines Economic Partnership Agreement.
“In fact, one big Japanese textile firm is just waiting for the signing of the JPEPA [to come in],” said Hernandez.
Cumulative investments from Japan could hit around P222 billion in four years, he said.
Hernandez said higher Japanese investments were among the benefits that the Philippines stood to gain with the JPEPA ratification.
“That is the intended benefit from the agreement and if the agreement is not ratified, there is a possibility that those benefits would not be achieved,” said Hernandez.
Trade Undersecretary Thomas Aquino, meanwhile, said the Philippines would also forego revenues from import duties of P3.2 billion to P4.7 billion based on projected 2007 imports.
“On tariff losses, the figure applies to the goods for immediate elimination such as industrial goods, capital equipment, those that are not produced locally,” said Aquino.
The foregone revenues, however, would be offset by a projected rise in exports to Japan, specially locally made auto parts and components.
“With JPEPA, we are looking at an increase of 5 to 10 percent in exports, which should translate to a consequent increase in the gross domestic product of 1.7 percent,” said Aquino.
Hernandez said the Philippines was exporting $2 billion worth of auto parts and components per year, but this should increase by $3 billion to $5 billion with JPEPA.
The capital- and labor-intensive automotive industry is by far the most vulnerable sector to JPEPA but the Japanese principals of car companies here have committed to continue local assembly operations.
Former Foreign Affairs secretary Domingo Siazon said Philippine agriculture exports would also benefit from the agreement.
Philippine mangoes, which accounted for 60 percent of the Japanese consumption in 2004, are exported to Japan at zero percent duty even.
“If we don’t agree to JPEPA, our mangoes would be slapped a most favored nation tariff of 3 percent from zero duties at present. We would lose to the likes of Mexico and Thailand, which is also exporting to Japan on preferential tariff rates under the Japan-Thailand Economic Partnership Agreement,” said Siazon.