PHILIPPINE trade agreements with the Association of Southeast Asian Nations (Asean), the United States (US), and the European Union (EU) are attracting Japanese manufacturers to build factories in the country.
Preferential trade deals are enticing Japanese businesses to set up shop in the Philippines so they can take advantage of such agreement, Trade Secretary Adrian Cristobal Jr. said Monday.
“Our two countries can work together to take advantage of the vast opportunities for growth in the Asean Economic Community [AEC], as well as in other large markets to which the Philippines has gained, and intends to gain, wider and deeper market access,” Cristobal said in a statement.
The AEC, which took effect on December 31, 2015, gives the Philippines the opportunity to trade with Asean member states with up to 99 percent tariff cuts.
The Philippines also benefits from the EU-Generalized Scheme of Preferences Plus (EU-GSP+), with more than 6,2 0 local products eligible for duty-free trade with the EU since December 2014.
Because of the EU-GSP+, Philippine exports to the EU grew by 27 percent in the first six months of 2015 from a year earlier.
Cristobal noted Japanese firms were among the first to take advantage of EU-GSP+, particularly bicycle maker Shimano.
The company has invested ¥3.5 billion in the Philippines, mainly to access the EU market.
“By setting up manufacturing facilities in the Philippines, Japanese companies can avail of the duty-free markets of Asean, EU, and US. Products which are key export interests of Japan can benefit from significant tariff differentials if produced in the Philippines. We are in fact the only country in Asean to enjoy preferential treatment from the EU and the US,” Cristobal said.
Last week, the Department of Trade and Industry (DTI) launched the Comprehensive National Industrial Strategy (CNIS) or the blueprint for inclusive growth goals through the industrial, services and agriculture sectors.
The CNIS lays down the government strategy in stimulating industrial growth through manufacturing and its links to agriculture and services. The CNIS aims to contribute an additional 2 percent to the gross domestic product.
The DTI said Cristobal was a recent the guest of honor during the Resona Foundation Seminar at the Osaka Chamber of Commerce Building in Osaka, Japan.
The foundation was established by the Resona Group to promote ties among the economies of Asia and Oceania by providing financial assistance to activities and seminars that focus on issues pertaining to economics, politics, history, culture, and environment.