The Actual State of Japanese Companies' Expansion into the Philippines

As of 2026-08-30 · Updated 2026-08-30 · Section: Economy, Industry & Business · 日本語版

1. First things first: there are 3 different "definitions" behind the numbers

The number of Japanese-affiliated companies in the Philippines ranges anywhere from the 1,600s to nearly 1,900 depending on the source, and even as low as "700." This is not padding — it is because different sources are counting different things.

注 JCCIPI's official website still carries a six-year-old figure of "686 companies (as of September 2020)." Japanese-language blog posts and investment-promotion sites often cite this figure as-is. For 2026, the correct figure to use is 685 companies (March 2026).

注 MOFA's "establishment count" is not the number of actual companies. It is the number of establishments with Japanese ownership above a certain threshold that overseas diplomatic missions have identified, and the survey's own notes state that for some countries the unit counted is "corporations" rather than "establishments." It cannot be used as-is for international comparisons.

How to read the sudden jump from 1,630 to 1,888

注 Breaking the figures down by the jurisdiction of each overseas mission shows that most of the increase occurred under the jurisdiction of the Consulate-General in Davao.

It is a stretch to interpret this as "the number of Japanese establishments in Mindanao grew 5.6-fold in one year." The more likely explanation is an apparent increase caused by a change in how the count was captured (e.g., a revision of the registry), and phrasing such as "Japanese companies increased 16% in 2025" should be avoided. Metro Manila and Cebu were essentially flat.

For reference: figures for other countries in the same survey (as of 1 October 2025)

Because of the definitional differences noted above (some countries counted on a corporation basis), this article does not assert a ranking such as "the Philippines is No. X in ASEAN." At minimum, it can be read from within this same survey that the Philippines trails Thailand, Vietnam, and Indonesia.

注 (Verified 2026-08-25) The other-country figures in this table could not be re-confirmed against the original source — i.e., they are unconfirmed. The relevant MOFA page (the "Survey of Japanese Business Establishments Overseas"/press release on mofa.go.jp) could not be reached (404 error), and of the figures China 26,273, Thailand 6,083, Indonesia 3,643, Vietnam 2,990, and Philippines 1,888, only the Philippines figure has been confirmed against the primary source. 注 If producing a document that compares countries, download and check the Excel breakdown by country and mission that MOFA publishes directly. In particular, China's establishment count has shown large year-on-year declines, and older figures (in the 30,000s) also circulate alongside newer ones.

2. The current state of investment flows: approval-based figures swing widely

Japan-origin investment on an approval basis, per the Philippine Statistics Authority (PSA), as reported by JETRO.

注 Approval-based figures can double or halve on the back of a single large project. This is a different thing from actual disbursed amounts (BSP's FDI statistics), and the two should not be conflated.

Approved foreign investment in Q2 2026 was ₱115.2 billion (up 68.2% year-on-year), but the top countries by amount were the Netherlands (₱50.7 billion), Germany (₱18.1 billion), and Singapore (₱10.0 billion) — Japan did not rank in the top three that quarter (PSA/BusinessMirror, 13 August 2026). Power and gas accounted for 59.3% of foreign investment in the quarter, and manufacturing 18.1%. By region, Cordillera accounted for 49.4%, Central Luzon 32%, and Calabarzon 12.8%.

3. Geographic concentration

3-1. Calabarzon (Laguna, Batangas, Cavite)

The core of Japanese manufacturing. Toyota and Mitsubishi Motors have assembly plants in Santa Rosa, Laguna; a Yazaki-affiliated wire-harness plant operates in Calamba; and Ibiden, among others, is concentrated at First Philippine Industrial Park (FPIP) in Batangas. FPIP itself states that cumulative investment from 1995 through June 2023 reached ₱766.55 billion, representing 27.37% of total PEZA investment (this is the operator's own claim, not a government statistic).

3-2. Cebu

• Tsuneishi Heavy Industries (Cebu), Inc. (THICI), in Balamban. In January 2026 it delivered what is described as the world's first methanol dual-fuel Capesize bulk carrier, "BRAVE PIONEER" (Manila Bulletin and others, 15 January 2026). Phase 1 of an on-site 3MW solar installation went online in August 2025. Shipyard expansion was announced to coincide with President Marcos's May 2026 visit to Japan (GMA Network, 29 May 2026).
• MinebeaMitsumi operates multiple plants in Cebu. The Japanese Chamber of Commerce and Industry of Cebu, Inc. (JCCICI) was founded in 1990.
• Taiheiyo Cement brought a ₱12.8 billion Cebu plant online in 2024 (Inquirer, 20 July 2024).

3-3. Clark (Pampanga)

• Clark Freeport's exports in the first half of 2026 reached US$2.663 billion (Manila Standard, 16 August 2026).
• In June 2026, BCDA presented roughly ₱100 billion worth of projects to Japanese investors (Inquirer, 2 June 2026). BCDA and CIAC also pitched to Japan in January 2026.
• Yokohama Rubber announced a ₱3.5 billion expansion in Clark in February 2024.
• In June 2026, a Japanese aircraft-leasing company announced a ₱600 million expansion at Clark Aviation Capital (Punto! Central Luzon, 23 June 2026).

3-4. Freeport Area of Bataan (FAB)

Among FAB's 153 companies, the top taxpayer is Mitsumi Philippines Inc. (a MinebeaMitsumi subsidiary). It received the "Sinag ng Bataan" award at the 269th founding anniversary of Bataan province in January 2026 (BusinessMirror, 16 January 2026). It produces semiconductors, camera actuators, connectors, and power components in Bataan and Cebu, and for the fiscal year ended March 2025, Philippine production reportedly reached approximately US$1.9 billion, or 15.1% of the parent company's total.

注 FAB's predecessor was the "Bataan Export Processing Zone," established in 1972, the starting point of the Philippines' economic zone system (JETRO regional/analysis report, 31 October 2025).

4. Industries and representative companies

注 On Murata Manufacturing and Brother Industries (cross-checked against another field, 2026-08-25 verification): the article in the field "Calabarzon and Mimaropa" § lists "Brother Industries, Canon, Ibiden, and Murata Manufacturing" as major Japanese tenants of First Philippine Industrial Park (FPIP) in Batangas. As far as tenancy at FPIP is concerned, this appears elsewhere in our reference materials. 注 However, this article's own re-verification could also not confirm either company against their official lists of manufacturing sites — i.e., unconfirmed. "Being listed as a park tenant" and "currently operating a manufacturing facility" are two different things (industrial-park tenant lists can include past occupants or affiliated companies). Neither statement has been removed. When producing a document that names individual companies, always verify against each company's own official site (group company list/manufacturing site list). 注 Also note that Canon closed its Batangas plant in June 2026 (Section 7), so the description "Japanese tenant of FPIP" is a description that changes depending on the reference date.

5. JETRO "FY2025 Survey on Business Conditions of Japanese Companies Overseas" (Philippines)

This survey was published on 17 February 2026, was conducted August–September 2025, and drew 5,109 valid responses overall (a 39.6% valid response rate).

The Philippines drew 170 valid responses (out of 516 companies surveyed, a 32.9% valid response rate; 84 manufacturing, 86 non-manufacturing).

5-1. Operating profit

注 A separate ASEAN-6 comparison document produced by JETRO's Kuala Lumpur office gives different figures for the Philippines — a 73.8% profitability rate and 56.9% expansion intent. The survey population likely differs (e.g., manufacturing only vs. all industries), so when citing either figure, always specify which document it comes from. This article uses the figures from the main report.

5-2. Appetite for business expansion (next 1–2 years)

The top reasons for expansion are "growth in local market demand" (60.0%), "increased exports" (25.9%), and "acceptance of higher value-added products/services" (14.1%). This suggests expansion driven mainly by domestic demand, with export-oriented expansion playing a secondary role.

5-3. Top 5 investment-environment risks

5-4. Wages and workforce

• Actual 2025 base pay increase rate: 4.9% (manufacturing 4.7% / non-manufacturing 5.0%)
• 38.7% say hiring is "becoming more difficult"; 3.0% say it is "becoming easier"
• Reasons cited for hiring difficulty: rising salary demands (76.1%), intensifying competition with other companies (45.7%)
• Rivals for talent: other Japanese companies (23.8%), local companies (22.4%), Chinese companies (17.3%) that competition for talent is fiercest among Japanese companies themselves is an easily overlooked point

5-5. Impact of US additional tariffs

• 28.3% of companies export to the US
• Of those, 34.0% say the negative impact is "large," and 38.3% say it is "currently unclear"
• Responses: cutting own costs (68.1%), price negotiations with suppliers (40.4%), passing costs on to prices (25.5%)

6. The substance of the challenges

6-1. Electricity costs

JETRO notes that "electricity costs are high even by ASEAN standards, hindering the growth of supporting industries" (JETRO regional/analysis report, January 2025).

Meralco's (Meralco official) most recent overall residential rate:

注 Reading the August 2026 decrease as "electricity prices have settled down" would be a mistake. The breakdown shows this is only being pushed down temporarily by a ₱950 million refund ordered by the ERC (AWAT, spread over 6 months at -₱0.5861/kWh); the underlying trend is upward, with NGCP transmission charges up ₱0.3024, taxes and other charges up ₱0.2113, and roughly ₱0.08 for uncollected amounts from 2011–2022 (being recovered over 36 months). Rates will reverse once the refund ends.

6-2. Administrative procedures and taxation

• The CREATE Act (2021) reduced corporate income tax from 30% to 25%; the CREATE MORE Act (2024) allows qualifying companies a rate of 20%, and extends the income tax incentive period to a maximum of 27 years.
• 注 On the other hand, JETRO notes that the CREATE Act and the Bureau of Internal Revenue's (BIR) VAT-related regulations have made the treatment of incentives for PEZA-registered companies more opaque, and that delays in VAT refunds and additional tax assessments are becoming barriers to further investment (31 October 2025).
• On 5 August 2026, JCCIPI signed an MOU with the Anti-Red Tape Authority (ARTA) (signed at the Embassy of Japan in the Philippines). Under the framework, JCCIPI acts as "ARTA Champions," reporting and helping correct regulatory bottlenecks (joint ARTA-JCCIPI release/BusinessWorld, 11 August 2026).

6-3. Retaining talent

JCCIPI's Secretary-General notes a strong tendency for talent in IT and other highly skilled professional roles to "flow toward better-paying foreign firms," and cites standardizing operations and codifying tacit know-how as countermeasures (May 2026). This aligns with JETRO's survey figures of 37.5% turnover and 29.9% difficulty hiring specialists.

7. Cases of withdrawal and downsizing

The Canon case was driven by a structural shift in product demand, not "a deterioration in the Philippine investment environment," and the Honda case was rooted in the small scale of its production. Withdrawal cases should not be taken as a direct verdict on the investment environment.

8. The 2026 Middle East conflict and its effect on electricity prices

The Middle East conflict that began on 28 February 2026 is having a strong effect on the Philippine economy as a whole.

There are three channels through which this reaches Japanese companies: ① rising power and fuel costs (already high by ASEAN standards); ② slowing domestic demand (a direct hit, since 60% of expansion plans cite growth in local market demand as the reason); and ③ rising imported-material costs from peso weakness (Meralco itself cites peso weakness as a factor in rate increases, Inquirer, 25 July 2026).

注 Meanwhile, the JETRO survey (conducted August–September 2025, i.e., before the conflict) showing "50.3% plan to expand" does not factor in this impact. Until the FY2026 survey (expected to be published in 2027), post-conflict sentiment cannot be confirmed numerically.

9. Japanese public-sector support and 2026 government-to-government developments

9-1. President Marcos's May 2026 state visit to Japan (the biggest topic)

• Dates: 26–29 May 2026
• Japanese companies expressed investment intentions of US$3.4 billion (approximately ₱210 billion). Companies named include ANA, Toyota, Mitsubishi Corporation, Marubeni, Panasonic, and Fast Retailing (portcalls.com and others, 27 May 2026)
• The Presidential Communications Office announced a projection of ₱56.3 billion and 10,300 jobs from four major companies and others (PCO, 28 May 2026)
• The two countries elevated their relationship to a "Comprehensive Strategic Partnership"
• Signed a new Japan-Philippines tax treaty (Department of Finance, 29 May 2026)
• Three MOUs signed covering smart cities, digital services, and fintech
• 2026 is the "Japan-Philippines Friendship Year"

注 Investment "pledges" do not guarantee execution. As the swings in approved investment amounts show (Section 2), actual amounts must be tracked via BSP FDI data or the picture will be misread.

9-2. JBIC (Japan Bank for International Cooperation)

On 26 September 2025, the Ministry of Finance established a "Japan Strategic Investment Facility" at JBIC, strengthening support for Japanese companies' overseas expansion in fields critical to the economy and national security.

9-3. NEXI (Nippon Export and Investment Insurance)

The Philippines is in Country Category D, and both general trade insurance and overseas investment insurance are rated "underwritable" (NEXI's country underwriting policy). 注 However, the relevant page's last-updated date is 8 July 2013 — quite old. Individual deals should always be checked directly with NEXI on a case-by-case basis.

9-4. JICA

The rail sector is entering a new phase in which Japanese companies are moving into the operations (O&M) stage of assets built with yen loans. This is a development worth watching both as an example of JICA's private-sector collaboration and as a case of Japanese companies expanding into non-manufacturing sectors.

10. Summary: points to watch in the second half of 2026

1. Take care with the definition behind the 1,888-establishment figure. Metro Manila and Cebu were essentially flat; a change in how the Davao jurisdiction's figures were captured may be the main driver.
2. The 69.8% profitability and 50.3% expansion figures predate the conflict (August–September 2025). Use them alongside the reality of 2.3% Q2 GDP growth, and make that gap explicit.
3. Electricity prices fell in August, but the underlying trend is still upward. Assume a reversal once the refund ends.
4. The biggest rivals for talent are other Japanese companies (23.8%). A 4.9% annual pay increase and turnover remain challenges.
5. Canon's withdrawal was driven by demand structure, and it is occurring in parallel with MinebeaMitsumi's ₱25 billion expansion. Do not force this into a single-direction narrative of "Japanese companies leaving" or "Japanese companies arriving."
6. Administrative procedures are cited as a challenge by 33.8% of respondents, but the August 2026 JCCIPI-ARTA MOU has created a framework for improvement. Whether this moves the needle in the next JETRO survey is worth watching.

日本語の詳細版: 分野「経済・投資」「フィリピンにおける日系企業の進出実態」（本サイト日本語版）。