AROUND $3-billion worth of Japanese investments and expansion projects are facing bottlenecks caused by ongoing travel restrictions and red tape in issuance of permits, the Department of Trade and Industry (DTI) said.

In a recent business dialogue with the DTI, Japan-based electronics and medical devices manufacturing firms in the Philippines said that they are exploring expansion and diversification projects but are constrained by problems such as securing visas for their executives and engineers.

They also expressed concerns about the slow processing of permits and licenses from regulatory agencies, as well as value-added and additional taxes imposed by local government units. Access to coronavirus disease 2019 (COVID-19) vaccines is also a concern.

“They inquired if foreign investors with significant investment and expansion plans could be assisted by way of green or express lanes similarly provided by host governments in ASEAN for foreign investors struggling to remain competitive under the challenges of a COVID-19 and post-COVID-19 environment,” DTI said in a press release on Thursday.

“As critical members of the global supply chain, locators are constantly reeling from the pressure of pandemic-related restrictions that have negatively impacted their bottom-line, production, and delivery schedules.”

Trade Secretary Ramon M. Lopez in response said that these issues are being discussed among various government agencies.

“Japan has been a strong and important trading partner and investment source of the Philippines. The country is an ideal host for Japanese manufacturing and R&D activities in electronics, printers, and medical devices,” he said.

Ten Japanese locators participated in the discussions, including printer firms Brother Industries, Canon, Inc., and Seiko Epson Corp. Medical device companies Terumo Corp. and JMS Co. Ltd. also participated, as well as electronics firms ROHM Co., Ltd., NIDEC Corp., MinebeaMitsumi, Inc., IBIDEN Co Ltd., and Murata Manufacturing Co., Ltd.

Collectively, these companies represent $2.5 billion in investments, $6.9 billion in annual exports, and 83,000 jobs in the Philippines.

Investors also said that they are interested in transitioning to renewable energy sources, in line with United Nations sustainable development goals.

“One locator that employs over 23,000 Filipinos across its three plants shared that a major customer is requiring its suppliers to switch to full renewable energy sources by 2023 and requested assistance to comply with this requirement,” DTI said.

Department of Energy Renewable Energy Management Bureau Director Mylene C. Capongcol said that the Philippines is working on increasing its share of renewable energy to 35% by 2030 and more than half of the country’s power mix by 2040.

Japan was the Philippines’ top export market at $10 billion in 2020 and was its second-biggest import supplier at $8.6 billion that same year.

Japan was also the Philippines’ biggest source of foreign investment commitments in the first quarter of 2021, accounting for more than half of approved foreign investments in that period. — Jenina P. Ibañez