Despite the Philippines growing diplomatic and trade relations with China, Japan still considers the Philippines as one of its favoured business destinations, particularly in the expansion plans of Japanese business firms to establish new factories and operations.
The announcement was made by Japan Bank for International Cooperation (JBIC) that conducted a survey among business firms operating in the Philippines.
Though China remains the top investment destination of Japan, other countries mentioned in the JBIC report are India, Vietnam, Thailand, Indonesia, the United States Mexico, Myanmar, Brazil and South Korea.
The report also disclosed that 47 Japanese firms see the Philippines as a promising country in the medium term plan. Japanese companies operating in the Philippines remain optimistic and these companies are involved in the manufacturing of electrical equipment, electronic makers and automobile assemblers.
Respondents also claimed that the Philippines remains attractive because of inexpensive labor, attractive local market, availability of qualified human resources and the country's trademark as a supply base for assemblers.
However, the challenges Japanese are facing include the security threats of insurgency in the Southern Philippines and social instability. According to the report, this remained the top concern of Japanese investors.
Respondents also mentioned competition with other companies, availability of senior management personnel, underdeveloped infrastructure, uncertain judicial system and rising labor costs as possible business threats.
While more than 40% of respondents claimed they would continue their investments in the Philippines, 3.5 percent answered that they might withdraw their investments or scale down.
Philippine President Rodrigo Duterte during his visit to Japan this year called Japan as a close friend of the Philippines as he told Filipinos to take care of Japanese tourists in the Philippines who are contributing much to the tourism growth of the Philippines.
Japan was also instrumental in providing assistance for the rehabilitation of Marawi City, an Islamic City, where 800 terrorists raided and fought 4,000 Philippine soldiers in that five-month long battle. Marawi needs at least 30 billion PESOS to recover economically from the armed conflict.