Japanese Foreign Direct Investment in the Philippines

Lina J. Valcarcel

Abstract


It is believed that foreign direct investments are beneficial to the host country for a variety of reasons.  It is in this light that Japanese FDI is examined.  Our survey results, interviews and other published sources indicate that Japanese firms contribute positively to the economy by providing employment, improving technology and promoting export trade, among others.  It is noted that Japanese firms are profitable and compare well with the performance of those in the top 1,000 corporations.  If Japanese FDI is doing well in the country and is contributing positively to the economy, how can they be attracted to locate here?  Political and economic stability is a major factor to consider.  The infrastructures needed for efficient and cheap operations are also important considerations for locating here.  Export promotions should also be encouraged instead of import substituting industries.  The availability of low cost, educated and highly trainable work force knowledgeable in the English language gives us comparative advantage over our Asian neighbours.  The Philippines must harness its resources not to miss the current wave of investment if it wants to catch up with its ASEAN neighbours.  Otherwise, it may find itself sliding backwards and be completely left out of the global market.  


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