The Philippine Economic Zone Authority (PEZA) is set to accommodate the manufacturing facilities of Japanese small and medium enterprises (SMEs) from Osaka, Japan to grow the number of locators in industrial parks.
The regulator cited the vast potentials of businesses, given the robust growth of the Philippine economy.
PEZA and the Osaka Prefectural Government (OPG) signed a memorandum of understanding late Tuesday to promote the Philippines as a hub for manufacturing facilities of Osaka- based SMEs.
This is part of PEZA’s target to increase the number of sizable locators in economic zones, Lilia de Lima, PEZA director general, told reporters after the agreement was signed. She noted that Osaka accounts for about 9 percent of Japan’s total gross domestic product (GDP).
She said “we need many manufacturing companies. This MOU will encourage Japanese SMEs” to build their facilities in the Philippines.
Under the MOU, the PEZA pledges to provide special economic considerations or incentives as the firms are mainly SMEs which have concerns over costs than the big players.
The OPG will promote and recommend the Philippines as a preferred manufacturing hub to Osaka-based SMEs. Japanese SMEs in prefectures tend to search for locations in Southeast Asia to build manufacturing hubs to further expand their businesses.
The incentives and grants under the MOU are still being worked out.
The PEZA plans to make a small cluster-based, community type economic zone inside the Lopez Group’s 450-hectare First Philippine Industrial Park (FPIP), to be called “SME parks” mainly for the Osaka investors.
The concept will lower the cost of trade and improve the supply chain to help businesses.
De Lima said this is the first time PEZA has attracted businesses through governments, and noted that the idea of an SME park will continue.
Adding more SME hubs in other industrial parks in the country will depend on the success of the project.