Times sources see more trade, investment deals after trip
Japanese Prime Minister Shinzo Abe is looking to offer 5 billion yen ($48.2 million) worth of loans to the Philippines when he meets with President Rodrigo Duterte next week, PNA reported over the weekend, citing bilateral diplomatic sources in Tokyo.
The funds will be used to help develop the farm sector in Mindanao, PNA said. Duterte was a longtime mayor of Davao City on the southern island before winning the May presidential elections the report said. He is the first head of state to come from Mindanao.
The Japan trip comes a week after Duterte’s four-day state visit to China, where $24 billion worth of loans and investment pledges were signed.
Analysts interviewed by the Manila Times are expecting similar deals will be forged in Japan, as well as boost trade relations between the two countries.
Japan is eyeing the Philippines as its gateway to the 10-member Asean region, which has a combined market of more than 620 million people and total GDP of $2.4 trillion in 2015.
“The Philippines is the future in Asean,” said Jonathan Ravelas, senior market strategist at BDO Unibank. “There will be a lot of potential investments from Japan, particularly on infrastructure, which is the centerpiece of the Duterte administration.”
Japan is the country’s biggest export market and top source of foreign direct investments. Government data showed that Japanese consumers accounted for more than 20 percent of local exports in August, while net FDI flows amounted to $1. 4 billion in January-July, representing nearly 60 percent of the total inflows the central bank recorded for the seven-month period.
In terms of trade, the Philippines enjoyed of a little over $190 million surplus with Japan in August, with total exports at $1 billion and imports at $807.8 million.
First Grade Holdings managing director Astro del Castillo said a number of Japanese firms are planning to expand, as well as to shift their operations to the Philippines from China because of the rising labor costs there.
“I won’t be surprised if Japan will try to match the investment commitments given by China during President’s visit last week,” del Castillo said.
In a statement, Malacanang said Duterte will visit Japan on October 25-27. He is scheduled to meet with Abe, and make a courtesy call to His Majesty Emperor Akihito at the Imperial Palace. This follows Emperor Akihito and Empress Michiko’s state visit to Manila early this year.
Duterte first met Abe at the Asean Summit in Vientiane, Laos last month.
The visit will coincide with the 60th anniversary of the establishment of diplomatic relations between the Philippines and Japan, the statement said.
Apart from business, del Castillo said the Duterte and Abe will likely discuss strengthening security relations between the two countries.
Malacañang said during the visit, Duterte will drop by Japan Marine United Corp., where the company is making vessels for the Philippine Coast Guard.
WITH A REPORT FROM PNA