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DTI ordered to study lobbying Japanese companies to relocate

Posted on March 25, 2011

THE DEPARTMENT of Trade and Industry (DTI) has been ordered to explore the possibility of offering the Philippines as an alternative production site for quake-hit Japanese firms.

"Perhaps this is high time for us to mount a trade delegation ... [and ask] them to transfer more of their production that cannot be done in the present time in Japan to the Philippines," President Benigno S. C. Aquino III yesterday said in a radio interview.

Mr. Aquino, who was visiting Cagayan de Oro, said he had asked Trade Secretary Gregory L. Domingo "to talk to the semiconductor industry and various other electronics manufacturers to try to see the possibility of lobbying ... not to profit from their misery but rather to satisfy a need that they have at this point in time."

Japanese embassy officials and Mr. Domingo were not immediately available for comment but the president of the Semiconductor and Electronics Industries in the Philippines, Inc. (SEIPI) said relocations would be welcome.

Some reservations were expressed by Board of Investments managing head Cristino L. Panlilio, who said Mr. Aquino’s proposal remained exploratory.

"We will be prepared for them but we cannot be assertive right now," Mr. Panlilio said, a sentiment also expressed by SEIPI President Ernesto M. Santiago.

"If we can help, if they do plan to divert some of their facilities elsewhere, that’s good for us," Mr. Santiago said, adding: "it will bring more players, more companies, more investments, and it will create more jobs."

A fifth of the estimated 900 semiconductor and electronics firms in the Philippines, he said, are Japanese and account for some $6 billion of the $31-billion industry.

Mr. Aquino’s statements, meanwhile, followed claims that some exporters were already experiencing a drop in orders from Japan.

"There have been no new transactions for the last two weeks. There have been no calls for new orders," Chamber of Furniture Industries of the Philippines Executive Director Salvio L. Valenzuela said on Monday.

Electronics account for the bulk of exports to Japan but furniture also takes a sizeable share. As of the first quarter of last year it accounted for 11.2%, or $422.55 million, next only to electronics’ lion’s share of 49.1% or $1.857 billion.

Mr. Valenzuela, however, said first semester shipments for the most part would not be affected given orders placed prior to the disaster.

"We don’t expect a decrease in furniture exports in the first quarter and second quarter. We’ll see in June or July," he said. -- reports from J. P. D. Poblete, Louise Dumas in Cagayan de Oro and AMGR