Helping small and medium tech businesses has always been on the agenda of the Department of Trade and Industry’s (DTI). This time, the Government of Japan decided to step up their game and launch a campaign with the focus on developing collaboration between Japan and the Phillippines.
The Department of Trade and Industry invited tech-focused SMBs from Japan to extend their reach to their colleagues from the Philippines and assist them in product and service design. DTI also invited Japanese companies to help the ones from the Philippines launch their products in the market.
The Dawn of New Partnerships
DTI Commercial Counselor and Special Trade Representative, Dita Angara-Mathay, was very honest while giving the statement last Monday: “We hope to ride the crest of the rising wave of Japanese SMEs migrating into the ASEAN region in search of new markets and technology partners.”
She was very clear about the goals and objectives of these efforts. According to her, Japan wants to create value. She added: “We want Japanese firms to partner with like-minded locals to co-create value through synergies that enhance capital efficiencies whether it be in the intellectual capital, HR or finance.”
It appears that the main goal is to motivate Japanese business owners to explore numerous opportunities. They can even partner up with banks and local government units. The Japanese government is standing by to assist them in establishing such delicate arrangements. These actions are supported by the Philippine Trade and Investment Center in Tokyo. They are also working on generating interest in this type of cooperation between Japan and the Philippines.
During the first seven months of 2017, Japan made direct foreign investments worth 171.5 million Philippines pesos ($3.2 million).
The Latest Developments
The latest developments prove the intentions of these two countries. In fact, the first exploratory mission of this type was launched very recently. The goal was to stimulate SMEs from Sanjo City in Niigata Prefecture to partner up with Philippine Companies and help them launch their products. Sanjo City is Japan’s most famous city for metal works.
Ms. Angara-Mathay said that the formalization of such a partnership is also very important. She added that the agency has already facilitated an agreement between a Philippine firm and a Japanese firm to be formalized. According to her, the first goal is to make a memorandum for understanding the standard type of agreement in these relations. We can expect to see the first one being signed in the first quarter of 2019.
This is very important if we want to see more partnerships forming in this framework. Newly signed memorandums of understanding will serve as breadcrumbs for other businesses to follow and find appropriate partners in their industry.
Biotech JP Corp. as an Outstanding Example
Ms. Angara-Mathay stated that they don’t want to achieve something that is brand new and too hard to get to. She used the opportunity to tell us that this type of collaboration already exists. The perfect example is Biotech JP Corp. In the Philippines. Biotech JP Corp. is known for its rice brand Echigo. But what many people don’t know is that this company is the Philippine unit of Niigata-based Biotech Japan Corp.
The end product which is intended for patients with kidney diseases is a result of the cooperation between Philippine and Japanese companies. It was developed from a local Philippine rice strain. But the fermentation technology used to develop Echigo comes from Japan.
We’ve decided to dig a little bit deeper only to discover that Biotech Japan Corp has signed a Letter of Intent way back in 2015. The same year, they have launched the Echigo brand in the Philippines. Today, Biotech JP Corp. has a research and development center in this country as well as production facilities in Batangas.
Ms. Angara-Mathay had few words to say about this specific case: “BTJ is a perfect example of how a DTI field office plays a highly effective role in shepherding a Japanese SME that ventured into unknown business territory, leveraged on a talented pool of workers, used indigenous material inputs, integrate these with Japanese technology to develop a new product with high social impact in agriculture (farmers) and medicine (patients) for the Philippine domestic market. From our country’s base, we can expand to the region.”
The chairman, Kiyosada Egawa also hopes that this is an amazing opportunity for both Japan and the Philippines. The Philippines can serve as a springboard to ASEAN for the sales and distribution of the rice brand in question. But there also so many other opportunities worth pursuing.
The Investments
Japanese businessmen are running on budgets that allow them to make direct investments. When we take a closer look at the current year and the last one, we can conclude that the budget, as well as the interest for direct investments, has increased. For instance, during the first seven months of 2017, Japan made direct foreign investments worth 171.5 million Philippines pesos ($3.2 million).
We can see that a lot has changed in 2018. In the first seven months of the current year, foreign direct investments totaled 2.65 billion Philippines pesos ($49 million). It’s clear that Japan is the top source of foreign direct investments two years in a row.
Thanks to the conjoined efforts of the Philippines and Japan governments, we can expect to see many other fruitful partnerships emerging. The Philippines have a lot to offer to Japanese businessmen, and vice versa. This is why it is safe to assume that all of the partnerships formed under the supervision of DTI are bound to turn into long-term solutions.
Slow and steady wins the race: Japan continues to systematically build more SMB opportunities with the Philippines.
