The Board of Investments (BOI) has asked Japanese manufacturers to turn the Philippines into their Southeast Asian hub for personal protective equipment (PPE) production on commitments of domestic demand, trade privileges and fiscal support.
The BOI last week presented to members of the Japan Hygiene Products Industry Association (JHPIA) the competitive advantages of operating a PPE factory in the Philippines. In an online briefing, the BOI stated its desire to turn the country into a manufacturing base for PPE makers from Asian neighbors, including Japan, Malaysia, South Korea and Taiwan.
Lanie O. Dormiendo, director of the BOI’s International Investments Promotions Service, pitched to JHPIA firms the growing population, labor pool and market access as benefits to investing in the Philippines.
“Our country can serve both as their market and manufacturing base for exports,” she argued. “Throughout in this unprecedented global health emergency, the Philippines has proven itself as a manufacturing hub for PPE and other medical supplies vital to fighting the pandemic.”
Based on BOI records, there are now at least 300 manufacturers engaged in the production of textile and garments, and they employ more than 510,000 workers who are capable of weaving PPEs and face masks.
As such, the country can now make over 80 million face masks, 10.2 million PPE coveralls and 65,700 face shields every month. Prior to the Covid-19 pandemic, the Philippines has no output at all for PPEs, and can only produce roughly 6 million face masks.
Dormiendo also informed JHPIA members the government rejected any move to impose export and import restrictions at the peak of lockdowns, and even assisted foreign investors to transfer their factories here to sustain their business operations.
Dormiendo said manufacturing firms can take advantage of tax cuts provided under the second Bayanihan to Recover as One Act. The law allows manufacturers to carry over financial losses incurred in fiscal year 2020 to 2021 as a tax deduction from gross income in the next 5 taxable years.
Likewise, firms bringing in raw materials and capital equipment for the production of PPEs and medical essentials are exempted from paying their import duties.
For Ferdinand A. Ferrer, vice president of the Confederation of Philippine Manufacturers of PPE (CPMP), the entry of Japanese PPE makers will improve the production capacity of local firms. The CPMP is made up of manufacturers who responded to the government’s call to retrofit their facilities to produce PPEs and face masks.
“We are open to partnerships and investments from our Japanese counterparts to explore more opportunities and further develop our capabilities,” Ferrer said.
Japan is one of the country’s largest sources of foreign capital, although the pandemic reduced investment inflows from Tokyo last year. From January to September of 2020, investments from Japan crashed more than 70 percent to P5.09 billion, from P17.33 billion during the same period in 2019.
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