Japanese semiconductor firms pledge billions of pesos in investments to Philippines

TOKYO— Japanese semiconductor companies have committed to invest “billions of pesos” to the Philippines - which could generate over 10,000 jobs - during the second day of President Ferdinand Marcos Jr.’s working visit here.

On Thursday morning, Marcos presided over the roundtable meeting attended by top executives from Japan's semiconductor and electronics firms - Japan Aviation Electronics Industry, Ltd.; Yazaki Corporation; Yokowo Manufacturing of the Philippines; Sumitomo Electric Industries, Ltd.; Brother Industries, Ltd.; IBIDEN Co., Ltd.; Seiko Epson Corporation; NIDEC-SHIMPO Corporation; and TDK Corporation - who are looking to expand their operations in the Philippines.

The total amount of investment commitments will be announced by the  President on February 10, 2023 during the signing of the letters of intent by the Japanese companies, according to the Presidential Communications Office.

The investment pledges are expected to generate more than 10,000 jobs, which are seen to boost the administration’s initiative to create more jobs for Filipinos.

In his remarks during the roundtable meeting, Marcos said the country aspires to become “hubs of excellence for sectors where we have a natural comparative advantage.”

“We want the country to attain the status as a regional hub for printers, wiring harnesses, and other electronic goods,” the President said.

Data from the Philippine Statistics Authority show electronic products are the Philippines top export with a total value of $42.49 billion in 2021, which accounted for 56.9% of the country’s $74.65 billion export sales during the period.

Marcos told the Japanese semi-conductor firms that the Philippines “consider[s] your operations significant.”

“You are a prime generator of jobs. You provide support for sectors critical to industrial development and you carry with you the promise to create value through innovation in global manufacturing around the world,” he said.

The President touted the country’s base of engineers, strong workforce, entrenched network of Japanese leading companies, and “a demonstrated history of success" in the information technology services sectors, which “offers promise for future expansion.”

“With the automotive industry moving toward electric vehicles and autonomous driving and the printer industry facing challenges related to digitalization and automation, we hope to see you recruit our talented human resources in your R&D (research and development) activities,” Marcos said.

Meanwhile, Trade Secretary Alfredo Pascual told the Japanese investors: “With the demand expected to grow in the global market, we would like to explore how we can encourage you to expand and upgrade your operations in the Philippines.”

The PCO said the Philippines is the fourth largest exporter of wiring harness in the world after Mexico, China, and Romania in 2021.

The country is also one of the lowest cost producers of wiring harness in the world, based on exported value and quantity, it added.

The PCO added that the trend has been building over a 20-year period where wiring harness exports from 2001 to 2021 grew at a steady pace of 9% per year. 

In a separate news release, the Department of Trade and Industry (DTI) said the Philippine electronics industry is classified into 73% Semiconductor Manufacturing Services (SMS) and 27% Electronics Manufacturing Services (EMS).

Most of the electronics businesses in the country operate in four key areas namely, Metro Manila, CALABARZON, Northern and Central Luzon, and Cebu.?

The DTI said the electronics industry also employs over three million direct and indirect workers. — RSJ, GMA Integrated News