THE Philippine Economic Zone Authority (Peza) hopes to entice more Japanese investors to bet on the country’s manufacturing sector, after it signed a memorandum of agreement (MOA) with the Osaka Prefecture on Tuesday.
“This MOA with the Osaka Prefecture will encourage small and medium companies to come here because we need manufacturing support companies like in die and mold,” Peza Director General Lilia B. de Lima told reporters on the sidelines of the MOA signing.
De Lima said Peza is keen on investments in manufacturing given the weak supply chain in the Philippines and the sector’s potential for job generation. The business delegation from the Osaka Prefecture consisted mostly of small and medium firms engaged in manufacturing products such as electronics and car parts.
The Osaka Prefecture offers huge trade opportunities for the Philippines as the Kansai region accounts for nearly a fifth of Japan’s GDP. As much as 60 percent of Kansai’s GDP comes from the Osaka Preferecture, according to Peza.
With the inking of the MOA, Peza expects trade relations between the Osaka Prefecture and the Philippine government to strengthen. The agreement is also expected to boost the Department of Trade and Industry’s efforts to pilot “Small and medium enterprise [SME] parks” for small Japanese manufacturers inside Peza zones.
The initiative, which is still in the early stages, aims to lure in small firms to help fill the gaps in the country’s manufacturing-supply chain. The government aims to cluster these small firms in one zone to reduce their cost.
The government said it intends to put common service facilities in SME parks as a way of helping small manufacturing firms cut costs. Small Japanese firms are reportedly keen on the clustering approach in industrial parks. According to an industry source, a pilot zone in an industrial park has already been identified by the government. The source, however, refused to reveal the location of the pilot zone.