Business
Benefit from PGMA’s foreign trips may take awhile
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Jul 2, 2009 - 2:39:24 PM

By the Philippines News Agency

MANILA, July 3 (PNA) -- Investments do not happen overnight, not even in the best of times. The job of attracting investments takes longer and the difficulty becomes sharper during crisis period.

Thus, it really requires the most influential person preferably the president of the land to put up a strong pitch for investments abroad. Sending a low-level official during investment and trade missions is futile during difficult times. At the same time, sending the highest official of the land during good times could help fast track investments inflow.

The latest trip of President Gloria Arroyo to Japan is actually her seventh during her administration, but who would not do that if that is the next best thing a president could do during this challenging time?

The president's latest trip to Japan means many things for the bilateral relations of both countries because it came on the first year of the effectivity of the Japan-Philippines Economic Partnership Agreement (JPEPA).

Cultivating a relationship under the new trading regime of the JPEPA is a must to be able to maximize the benefits and follow on commitments under the free trade deal with the country’s second biggest trading partner.

Arroyo and former Prime Minister Junichiro Koizumi signed the JPEPA on Sept. 9, 2006. As a bilateral trade treaty, JPEPA seeks to promote investments and trade of goods and services.

JPEPA is the Philippines' first bilateral free trade agreement.

While in Japan, the president did pitch for more Japanese investments and trade in the Philippines and employment opportunities for Filipino nurses and caregivers in Japan.

Although Japan has committed itself to hire Filipino caregivers and nurses under the JPEPA, the treaty does not mention specific figures.

Upon the ratification of the agreement by the Philippine Senate on Oct. 8, 2008, an initial 400 Filipino nurses and 600 caregivers would be allowed to undergo training under the JPEPA scheme. In line with this, 93 Filipino nurses and 180 caregivers left for Japan last month to get free language and skills training for six months. Another group of 10 Filipino caregivers followed suit.

While JPEPA is an "economic" agreement and one of its main purposes is to reduce barriers to the entry into Japan of Philippine products like bananas, it also aims to facilitate the movement of people, in particular, Filipino nurses and caregivers to that country.

The president’s four-day visit was spent on meeting with Emperor Akihito and Empress Michiko at the Akasaka Palace, and Japanese Prime Minister Taro Aso, and Japanese industrialists to invest in the Philippines.

She also held meetings with various Japanese financial institutions and firms, including the Japan Bank for International Cooperation (JBIC), and the Japan International Cooperation Agency (JICA).

Arroyo herself hailed her trip as "a new era of economic relations" with Japan, referring to the JPEPA.

"With the entering into force of the joint paper, now we open a new era of economic relations," Arroyo told Japanese business leaders, referring to the bilateral free trade deal that took effect in December last year.

"Let me say to the Japanese business community: for growth even through the global crisis, invest in the Philippines. Trade with the Philippines," Arroyo told the Japanese community.

Indeed, Arroyo wrapped up her official visit to Japan netting over $ 5 billion in investment and financial assistance commitments.

Finance Secretary Margarito Teves and Trade and Industry Secretary Peter Favila estimated that at least $ 5 billion in investment commitments and more offers of official development assistance (ODA) for agriculture credit programs, infrastructure, and disaster-mitigation projects were generated from the president’s Japan trip.

These include the three loan and grant agreements amounting to $ 467 million to finance an agriculture credit facility, and fund flood mitigation and other infrastructure projects in the country through the JICA, the Land Bank of the Philippines and the Development Bank of the Philippines.

Also included in the JICA-funded projects are the Flood Disaster Mitigation in Camiguin Island amounting to $ 10.7 million; the $ 308-million Logistics Infrastructure Development Project; and the $ 148-million Agricultural Credit Support Project.

The Philippines and the JBIC have entered into an agreement where the latter would guarantee up to $ 1-billion worth of yen-denominated "Samurai" bonds that would be issued by the government in the next two years.

Toshihiro Nikai, Japanese Minister for Economy, Trade and Industry also assured Favila of some $ 1.8 billion to $ 2 billion in ODA have been made available for modernization of the country's ports and airports, as well as grants of general funds to cover the country's deficit.

Favila also signed an agreement with Toyota Tsusho chairman Masaaki Furukawa on a joint venture with the National Development Corporation for a jatropha plantation project in Gen. Santos City, acquisition of grain silos, and windmill projects in Ilocos Sur.

He also said Marubeni Corporation expressed interest in undertaking the LRT-2 expansion project estimated to cost $ 500 million, and implementing a project to modernize air traffic control facilities in the country.

In addition, Favila said that a Japanese publicly-listed firm has presented plans to Arroyo to undertake a resort complex development project in the country with an initial investment of $ 2.6 billion which could rise to $ 6 billion, depending on its implementation. Favila, however, refused to reveal the firm’s identity.

Japan has also committed to continue its development projects in Mindanao despite the stalled peace talks between the government and the Moro Islamic Liberation Front.

The economic benefits from the president’s official state visit may take awhile to realize, but these could not have been accomplished had it not been for the President’s personal attendance in Japan.

In a country where investment and trade promotions budget is considered insignificant in contrast with other competitor countries, sending the president is the most cost efficient way to lure investors and solicit for ODA funds. (PNA)