by Janine Marie D. Soliman, Businessworld, Feb. 02, 2017
MITSUBISHI UFJ Financial Group, Inc. (MUFG) expects more Japanese companies to enter the Philippines with economic growth to range between 6-7% this year, led by heightened consumer spending, robust business process outsourcing (BPOs) sector and overseas Filipino worker (OFW) remittances.
“The Philippines is one of the fastest growing economies in ASEAN (Association of Southeast Asian Nations) countries and still projected to grow at 6-7% going forward,” MUFG Managing Executive Officer and Chief Executive Officer for Asia & Oceania Takayoshi Futae told reporters in a media roundtable on Wednesday.
The estimate by Japan’s largest lender in asset terms falls within the government’s official target of 6.5-7.5% growth for 2017.
Mr. Futae noted that in slow-growing Japan, “the Philippines’ growth is amazing.”
Asked what factors are behind the bank’s GDP forecast for the Philippines, Mr. Futae told BusinessWorld: “Basically the growing young population’s consumer spending; two is [the business process outsourcing sector] and also the very stable remittances from overseas Filipino workers.”
The Information Technology and Business Processing Association of the Philippines (IBPAP) said in October that it expects the BPO sector to continue expanding in the next six years, earning up to as much as $38.9 billion in revenue by 2022.
IBPAP aims to generate $25 billion in net revenue in 2016, while latest available data indicate a revenue total of P22.9 billion, putting the target within reach.
The sector’s work force is also approaching the association’s target of 1.3 million, with around 1.15 million employed in the industry.
Meanwhile, money sent home by OFWs hit $2.217 billion in November, up 18.5% year on year.
The growth was the biggest since the 26.4% rise in July 2008.
Mr. Futae noted that the country is “pretty stable and [doesn’t] count on volatile unexpected business so I think we can continue to expect Philippines to grow not only this year but also for several years going forward.”
With the country’s attractive economy, Mr. Futae also said that a number of Japanese companies “are very serious to expand operations here in the Philippines.”
MUFG General Manager Tadahiro Miyamoto noted that with household consumption comprising around 70% of national output, “a lot of Japanese companies are very much interested in doing business here, selling their products, and those are the ones that we can expect to invest here in the Philippines.”
Meanwhile, asked what type of investments are coming to the Philippines, Mr. Miyamoto expects government aid alongside investments for the private sector and infrastructure projects, noting that “a lot of Japanese companies are looking into that kind of investment whether they have a company here or not.”
Mr. Futae said the bank has organized a “business matching” event for around 100 Philippine and Japanese companies on Feb. 22, to which both local and foreign firms will be able to meet and possibly find partnership opportunities.
“Everybody needs a partner. Many Japanese want to expand their business here in the Philippines, but they don’t know the market. They need help by working together, both sides can better serve the country and customers,” Mr. Futae said.
“We are trying to help Japanese companies to expand in overseas markets and we try to find good partners for Japanese companies and if they grow we can grow,” he added.