THE Philippines has the highest productivity in the manufacturing sector in Southeast Asia, as Japanese investors find the minimum wage here most appropriate for the level and volume of work completed by laborers.
In the 2019 Jetro Survey on Business Conditions of Japanese Companies in Asia and Oceania, the Philippines took the top position in the appropriateness of the minimum wage from the perspective of productivity.
“The proportion of companies that answered that the minimum wage in the country/region was appropriate from the perspective of productivity was the highest in the Philippines, followed by Laos and Myanmar. The proportion was the lowest in Indonesia, followed by Cambodia and Australia,” the survey reported.
The survey said 74.2 percent of Japanese firms find the daily pay set by the government in the Philippines appropriate for the labor force’s level of productivity. On the other hand, 6.5 percent find it not appropriate, while 19.4 percent have no answer.
Trailing the Philippines is Lao PDR with a productivity approval of 66.7 percent from Japanese investors, followed by Myanmar at 60.9 percent and Vietnam at 50.9 percent.
Further, 44.5 percent of Japanese firms said Thailand’s minimum wage is on a par with its level of productivity, while Malaysia had 39.7 percent of productivity rating. Singapore received 31.5 percent of productivity approval from its Japanese investors, while Cambodia and Indonesia had the lowest at 24.2 percent and 23.7 percent, respectively.
In terms of future business plan, the Philippines ranked third in the region on number of Japanese firms that look to expand this year. The Jetro survey reported nearly 52 percent of Japanese businesses here are eyeing to expand operations in 2020.
This number was lower than those recorded in Vietnam and Myanmar, posting expansion ratings of 63.9 percent and 61.6 percent, respectively.
Indonesia came behind the Philippines with 50.7 percent of its Japanese investors expanding, while Cambodia had 50 percent, Lao PDR 50 percent, Thailand 44.7 percent, Singapore 43.9 percent and Malaysia 42.1 percent, according to the Jetro survey.
The Japan External Trade Organization, or Jetro, is a
Japanese government-affiliated organization that promotes trade and investment
with the country’s economic partners. Yearly, it comes up with a survey
measuring the business situation of Japanese investors in various countries and
region. For the 2019 survey, the Jetro
compiled the insights of 139 Japanese firms in the Philippines, of which 73 are
in manufacturing and 66 in
nonmanufacturing industries.