ASEAN, including the Philippines, has become an attractive investment destination for Japanese companies in China who are looking elsewhere to expand or build their new factories because of rising labor costs and geopolitical concerns.
Between 2013 and 2014, Japanese foreign direct investments (FDIs) in Asean increased by 120 percent and reached $24 billion. In comparison, Japanese inflows into China dropped by more than 30 percent, valued at approximately $9 billion.
A 2014 PricewaterhouseCoopers report found that Asean’s four biggest economies received up to 58 percent of Japanese FDIs at $20.3 billion. This amount was more than twice the Japanese FDIs into China ($9.4 billion) in the same year.
In a recent Japan External Trade Organization (Jetro) survey of Japanese firms in Asia and Oceania, close to 60 percent of the respondent-firms in the Philippines, reported that they intend to expand their businesses within the next two years.
In fact, more than 71.2 percent of the Japanese investors are confident they will turn a profit in their Philippine operations. That bullish outlook is among the top 10 across Asia and Oceania, is only 0.3 percentage points lower than the proportions for Australia, Hong Kong and Macau, and is the highest among Asean, where the regional average is 62.7 percent.
Several barriers notwithstanding such as the underdevelopment of our infrastructure and policy uncertainty, it appears the pivotal factor is the Filipino worker—young, literate and English-proficient; readily available and highly trainable.
Given our English proficiency, more than 70 percent said they experience less linguistic or communication problems in the workplace, compared to 10.7 percent in Thailand, 6.0 percent in Indonesia, and 5.9 percent in Vietnam.
Up to 42.5 percent said it is easy to hire local staff (such as general workers and clerks), while only 33.1 percent said so in Vietnam, 24.1 percent in Indonesia, 15.8 percent in Thailand, and 4.6 in Malaysia.
Such glowing tribute to our people jibes with findings in the World Economic Forum’s (WEF) 2015 Human Capital Index (HCI), which I discussed last week. At an overall 46th out of 124 economies surveyed in the HCI, we are second in Asean (next only to Singapore), sixth among 22 Asia-Pacific economies and fourth among 31 lower-middle income countries.
The Jetro survey and the WEF’s 2015 HCI both capture how highly foreigners regard us Filipinos and our capabilities.
Sometimes, we should see ourselves the way others see us. We are blessed with an open, hospitable and welcoming people. We are a nation of 100 million consumers—of very young citizens, who are tech-savvy and highly mobile. Given these blessings and more, we should be more optimistic and less cynical; more proactive and less carping.
The Philippines is entering its “demographic sweet spot,” meaning there will be more working people in the workplace than dependent children and retired people. We will be a nation of the young, where the average age of our population will be 26 years old.
That “demographic dividend” could translate to higher per-capita income, higher savings rate, and a broader tax base—the underpinnings for a prosperous, stable and peaceful Philippines.
Hence, our choice of the next president, the criteria we lay down for selection, and the set of knowledge and skills we expect, are crucial.
E-mail: angara.ed@gmail.com.