TAGUIG, Philippines — Japan has commended the Philippines for its initiatives aimed at bolstering the investment and business landscape, fostering optimism for increased Japanese engagement in the country. At the Japan National Day reception held in Taguig on Friday night, outgoing Japanese Ambassador Kazuhiko Koshikawa highlighted the potential for these efforts to attract more foreign direct investment from Japan, a country already deeply intertwined with the Philippine economy.
According to Philippines News Agency, the Philippines' dedication to refining its business environment is a welcome development that promises to encourage more Japanese firms to explore opportunities within the nation. However, he noted past concerns with the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act of 2021, which, despite its positive intentions, has been perceived as diminishing the country's competitive edge. The Ambassador underscored the importance of revising certain provisions related to value-added tax (VAT) to prevent potential disinvestment by Japanese companies.
In response to these concerns, the Philippine Senate announced last month its intention to review proposed amendments through the CREATE to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) bill. This legislation aims to introduce a more efficient tax refund system for businesses and a risk-based audit framework, enhancing the VAT refund process's predictability and efficiency.
During his speech, Koshikawa reflected on the strengthening bilateral ties between Japan and the Philippines, which have expanded beyond traditional cooperation areas to include defense, infrastructure, and peace efforts in Mindanao. He proudly noted the increase in Filipino tourists to Japan, with over 620,000 arrivals in 2023, making the Philippines a leading source of travelers from ASEAN to Japan.
The Ambassador also highlighted significant diplomatic exchanges, including President Ferdinand R. Marcos Jr.'s visit to Japan in February 2023, which saw robust support from both the Japanese government and private sector for the Philippines' economic development agenda. A subsequent summit between President Marcos and Prime Minister Fumio Kishida in November 2023 led to an agreement to commence negotiations on the Reciprocal Access Agreement (RAA), aimed at enhancing military cooperation.
Furthermore, Japan's commitment to the Philippines' infrastructure development remains steadfast, with significant projects such as the Metro Manila Subway, the North-South Commuter Railway, and the Davao Bypass underway. Ambassador Koshikawa expressed hope for continued collaboration towards regional peace and prosperity, emphasizing the shared values and close relationship between the two nations.
As Ambassador Koshikawa concludes his tenure, he aspires for the partnership between Japan and the Philippines to reach new heights under the leadership of both countries and the support of their people.