JAPANESE investors are seeking opportunities in Philippine retail, real estate and consumer finance, a Japanese banker said.

At a news conference in Makati City, Mitsubishi UFJ Financial Group Inc (MUFG) managing director and Philippine country head Yuichi Yamagishi said: “The retail, real estate, area, or consumer finance areas and also fast food and infrastructure…these are what Japanese companies are focusing on.”

MUFG’s Philippine strategic partner is Security Bank Corp.

Another official said the main drivers of Japanese interest are the young population and a growing economy, while the negatives are centered on tax policy and infrastructure.

Security Bank Corp. Alliance Segment Head Takahiro Onishi added: “When the Japanese talk about the Philippines, they always talk about how young the population is and how much they’re growing the size of the population… so they’re always counting on the demographics and the population growth and I guess the domestic growth based on consumption. So that’s where the business is.

“Whether they are new to the Philippines or they have already invested here… (the) first (concern) is the issues… especially the manufacturers who are in the PEZA (Philippine Economic Zone Authority) zones… and that is being discussed right now. And that may change (their level of interest) and that is keeping the companies concerned,” he said.

“They are not entirely sure about the policy… (Does) the Philippine government… actually want foreign companies to come in and invest? Or are they prioritizing the prosperity of local companies instead of inviting more and more investment,” Mr. Onishi added.

House Bill 4157 or the Comprehensive Income Tax and Incentives Rationalization Act (CITIRA) — which will progressively reduce corporate income tax to 20% by 2029 from the current 30% and remove tax incentives deemed redundant — has been approved in the House of Representatives. Its counterpart bill is still pending in the Senate.

Finance Undersecretary Karl Kendrick T. Chua has said that Department of Finance (DoF) expects the lower income tax packages to encourage companies to invest their savings in expansion, which has the potential to generate about 1.5 million additional jobs.

Meanwhile, The Department of Trade and Industry (DTI) backs a five-to-seven year transitory period for economic zone locators, as well as a seven to 10-year transition period for companies with at least 3,000 employees.

Infrastructure is a concern, according to Mr. Onishi, because “this would affect logistics, the transportation of their goods, how do they store their goods and maintain the quality of the products both when they’re being stored and when they’re being transported to other places,” he said.

In 2016 MUFG bought a 20% stake in Security Bank and has sought to leverage its relationships to offer business-matching between Japanese and Philippine companies.

Security Bank closed unchanged at P203 on Friday. — Luz Wendy T. Noble