CENTRAL BANK RECORDS DECLINE IN JAPANESE INVESTMENTS

Manila, June 2, 2003 -- Japanese Ambassador to the Philippines Kojiro 
Takano was not exaggerating when he spoke before a foreign press group. 
Like most Japanese, he does not just talk about the perils and folly of 
investing a good part of their money in the Philippines but the Japanese 
also act decisively on it as well, as reflected in the dangerous plunge in 
Japanese investments in the country by at least 73 percent.

Latest data from the Bangko Sentral ng Pilipinas (BSP) show declining 
Japanese investments in the country in terms of both direct or equity 
interests as well as portfolio or speculative funds flow.

According to BSP records, Japanese investments in the Philippines in both 
categories have dropped by 73 percent in January alone to only $12.25 
million from $45.99 million last year.

The sharp fall boosted pronouncements by Takano, who had described the 
Philippines a dangerous place for Japanese who bring in so much and do much 
good for the economy as a whole.

The numbers confirm that Japan is the single biggest foreign investor 
cluster in 2002, accounting for just under 53 percent or $754.12 million of 
a total $1.43 billion in direct investments last year.

And for years now, Japan is acknowledged as the largest source of soft 
loans or official development assistance (ODA) loan packages that fund most 
of the infrastructure projects that connect and power up the country's more 
than 1,000 islands.

Under the 26th yen loan package, for example, Japan is seen to commit 
another P26.7 billion worth of loans.

In contrast, the United States has direct equity investments in the country 
worth only $55.41 million in 2002.

Direct Japanese equity investments in January this year amounted to $2.7 
million and nothing at all from the Americans, records show.

An Asian diplomat, on condition of anonymity, told the Tribune that the 
Philippine government “better stop” its offensives against the Japanese 
ambassador, since he must have spoken with clearance from Tokyo.

“They (Arroyo administration) are going about it the wrong way. In those 
statements made by the Japanese ambassador is a strong message obviously 
coming from home office, for (the Arroyo administration) to start shaping 
up,” he said.

While Malacañang and even President Arroyo turned sarcastic in replying to 
Takano's statements, private business organizations carefully crafted their 
comments when solicited for reaction to Takano's much-criticized 
pronouncements.

The influential Bankers Association of the Philippines (BAP) said the 
Japanese ambassador's comments had “basis” but expressed reservations as to 
the manner the comments were delivered.

“There was basis for what he said but it was really more in the manner that 
he said it. It was undiplomatic and un-Japanese,” BAP executive director 
Leonilo Coronel told reporters.

According to Coronel, Takano would have obtained more for the Japanese in 
the Philippines had he discussed the matter with government officials “in 
the privacy of a room” instead of dishing out his sentiments in a public 
forum as widely covered as that held recently by the Foreign Correspondents 
Association of the Philippines.

“Had he gone to Malacañang and talked to officials, he would have had 
better reception and it would have been more constructive,” he added.

It is common knowledge among foreign investors and their embassies, 
however, that all these complaints about the ailing business climate, made 
worse by corruption and the deteriorating peace and order and security 
situations, have all been aired in private, and with government officials 
and later, publicly, since their problems are not being attended to by 
Arroyo officials.

The Japanese Chamber of Commerce, for one, had aired the same complaints, 
months before the ambassador aired the same sentiments last week.

But the chairman of the Employers Association of the Philippines, Donald 
Dee, said that which Takano said was “exaggerated” and “damaging” and that 
Malacañang was correct in censuring the Japanese official soon after.

“You cannot allow him to talk recklessly. To say he was not able to sleep 
for a year is exaggerated and beyond policy. He should have been more 
direct,” he noted.

Dee, who has Japanese partners in his many business ventures, claimed none 
of his colleagues “shared” Takano's perception of the business environment 
and of the peace and order situation in the country.

“That comment was damaging. He should have brought it before the proper 
forum,” Dee reiterated.

But private business officials, who also requested anonymity, pointed out 
government officials were “more concerned about form rather than substance” 
when dealing with the ambassador's comments.

The officials said no one in the government can refute with any amount of 
conviction the statements of the Japanese official although they all would 
rush to the defense of Malacañang on the propriety of coming out with 
statements as damaging as what the Japanese ambassador said.

They added the ambassador acted with nothing but concern for Japanese car 
manufacturers, for instance, who collectively stand to pay more in excise 
tax and suffer a decline in sales starting this month.

Takano had said business policies in the Philippines were rather 
“unpredictable, particularly in terms of consistency and transparency.”

Reported by: Sol Jose Vanzi

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