Japan-Philippines Economic Relations in Detail — Trade, Investment, ODA, EPA, and People-to-People Ties in Numbers

As of 2026-09-08 · Updated 2026-09-08 · Section: OFWs, Remittances & Filipinos in Japan · 日本語版

注Verified 2026-08-26. Two significant errors were corrected. 1. The Japan-Philippines EPA's tariff-elimination rates are "about 92% on the Japanese side / about 97% on the Philippine side" — the old version had the two reversed (section 4-2). 2. The cumulative ODA figure of ¥4,625,643 million was cumulative through FY2022, not FY2021, so the increase was "¥304,289 million over one year (FY2023)," not "about ¥300 billion over two years" (section 3-1). Beyond this, the article also refines the Philippine-side trade statistics, adds 2022 to the DAC donor table, and clarifies the indicators behind various rankings and cumulative amounts. For the complete list of corrections, see the "Verification Record (2026-08-26)" at the end of the cluster's representative file, "1987年憲法."

2026 marks the 70th anniversary of the normalization of diplomatic relations between Japan and the Philippines. At the summit meeting on May 28, 2026, between President Marcos (Ferdinand Romualdez Marcos Jr.), who visited Japan as a state guest, and Prime Minister Takaichi, the two countries' relationship was elevated to a "Comprehensive Strategic Partnership" (Ministry of Foreign Affairs, "Japan-Philippines Summit Meeting and Dinner," May 28, Reiwa 8). Japan is the first country to receive this designation from the Philippines. This article organizes the hard numbers underlying that economic relationship, drawing on primary sources wherever possible.

1. Trade — a rare "near-balanced" relationship

1-1 2025 as seen in Japanese statistics (Ministry of Finance Trade Statistics)

As a trading partner of Japan, the Philippines ranks 19th in exports and 16th in imports.

Source: Ministry of Finance Trade Statistics (final confirmed figures), as compiled by JETRO in "Japan's Trading Partners 2025 — Top 50" (jetro.go.jp/ext_images/world/japan/stats/trade/excel/rank_top50_99-25.xlsx, 2025 sheet). In the 2026-08-26 verification, the original file was re-read with openpyxl, confirming: exports US$10,403,150 thousand (19th, 1.4% share, +4.0% year-on-year) / imports US$10,426,184 thousand (16th, 1.4% share, +9.6%) / total exports US$737,604,604 thousand / total imports US$756,754,948 thousand. The "19th / 16th" indicator is "country/region ranking by amount (in US dollars)."

From Japan's side, the trade balance with the Philippines is −US$23.0 million (10,403,150 − 10,426,184 thousand dollars — an essentially negligible deficit), making it effectively balanced. This is an extremely unusual shape for one of Japan's major trading partners — unlike the large imbalances with China (exports 125,534,180 − imports 178,257,143 = −US$52.7 billion) or the United States (exports 136,060,741 − imports 86,297,385 = +US$49.8 billion) (recalculated from the same file in the 2026-08-26 verification).

注 For the same year 2025, JETRO's "Philippines Overview and Basic Statistics," which uses the Global Trade Atlas (GTA) basis, shows exports of US$10,413 million and imports of US$10,430 million — a gap of US$10–20 million from the Finance Ministry's final confirmed figures. This stems from differences between finalized figures and the source used for compilation, and does not affect the order-of-magnitude discussion.

1-2 2025 as seen in Philippine statistics (PSA)

From the Philippine side, Japan's presence looms far larger than it does from the Japanese side.

Source: PSA's "2025 Full-Year International Merchandise Trade Statistics" (published January 2026), as reported by Manila Bulletin, January 27, 2026, "US reclaims top spot for Philippine exports in 2025," among other outlets. (corrected in the 2026-08-26 verification) The old version gave ranges of "imports from Japan of about US$10.5–10.6 billion," "China at US$38.22 billion," and "total imports of US$133.57–134.20 billion." The figures that multiple news reports agree on as the published PSA values are imports from Japan of US$10.63 billion (7.92%) / China at US$38.44 billion (28.6%) / total imports of US$133.57 billion. 注 Primary source not yet reached (ongoing) — Neither the PSA site (psa.gov.ph) nor the House of Representatives CPBRD's 2025 trade fact-sheet PDF could be reached at the time of this verification, due to bot protection (automated-access screening). The figures above therefore rely on secondary reporting of PSA announcements that has not been confirmed against the original table, and some reports (the Manila Bulletin table) give China at US$38.22 billion and imports from Japan at US$10.52 billion, showing a remaining wobble of about ±US$200 million. This does not affect the order-of-magnitude or ranking discussion, but figures should be re-checked against the original PSA table before citing anything past the first decimal place.

1-3 Why do the figures not match

There are four main reasons. 1. Valuation basis — Exports are recorded FOB (free on board), imports CIF (cost, insurance, and freight). So "the Philippines' imports from Japan (CIF) > Japan's exports to the Philippines (FOB)" is theoretically expected, with the 1–2% gap corresponding to freight and insurance. 2. How the destination is recorded — The Philippine export statistics record by "country of destination," but electronic components are often transshipped and re-sorted through Hong Kong or Singapore, so they may not show up in Japan's import statistics as "originating from the Philippines," or conversely, third-country transshipments get recorded on the Philippine side as bound for Japan. This routing effect is largely why exports-to-Japan diverge by as much as US$1.1 billion. 3. Timing of recording — Customs-clearance timing (shipments straddling year-end). 4. Currency conversion — The Philippine side converts a peso-denominated original table to dollars, while Japan converts a yen-denominated original table to dollars, so differences arise depending on how the average rate for the period is taken.

注 Therefore, the asymmetry itself — "the Philippines' 2nd/3rd-largest partner is Japan," while "Japan's 16th/19th-largest partner is the Philippines" — is the real substance of the bilateral relationship, and the statistical discrepancies should be understood as noise layered on top of it.

1-4 Major items

Source: JETRO, "Philippines Overview and Basic Statistics" (original data from the Global Trade Atlas, 2025).

The pattern is straightforward: Japan sends intermediate and capital goods for manufacturing (electronic components, machinery, steel, auto parts), and the Philippines sends back electronic components assembled at Japanese electronics/semiconductor plants, along with primary commodities (bananas, timber, minerals). The fact that "electrical machinery" is the largest item in both directions reflects how Japanese companies' cross-border division of production shows up directly in the statistics.

1-5 Bananas — a share that keeps steadily shrinking

Based on Ministry of Finance trade statistics, Japan's 2025 imports of bananas (fresh, including plantains) break down as follows.

Source: Japan Banana Importers Association, "Banana Imports by Country" (compiled from Ministry of Finance trade statistics, 2025 confirmed figures).

注 Watch for outdated figures — The claim that "80–90% of Japan's bananas come from the Philippines" still circulates, but it has declined from 83.6% in 2018 (838,305,658 kg out of a total 1,002,848,849 kg) to 74.48% in 2025. Over the same period, Vietnam (from 2,255,541 kg in 2018 to 46,186,389 kg in 2025, roughly a 20-fold increase), Cambodia (from essentially zero to 35,387,950 kg), and Laos (likewise, to 14,212,920 kg) surged, as sourcing diversified. On the Philippine side, TR4 disease (new Panama disease) and typhoon damage have taken a toll. Note also that the industry-quoted "about 85% on a distribution basis" is a different metric from the import-volume basis used here.

1-6 Nickel and copper

Japan's nickel ore supply structure depends on the Philippines and New Caledonia (JOGMEC, "Structure and Trends in the Nickel Market"). Dependence on Philippine ore has risen since Indonesia imposed a full ban on ore exports in January 2020. 注 Meanwhile, a bill to ban nickel ore exports is under deliberation in the Philippine Senate (JOGMEC, "Recent Developments in the 2025 Nickel Market," December 19, 2025), which represents the biggest potential risk to Japan's supply chain. 注 For the country breakdown of Japan's 2025 nickel-ore and copper-ore imports, this article was unable to reach the original Ministry of Finance trade-statistics table (e-Stat's commodity-by-country tables), so the specific shares are treated here as "unconfirmed."

2. Investment — three sets of statistics telling three different stories

2-1 Japan's direct investment in the Philippines (Ministry of Finance / Bank of Japan basis)

The balance-of-payments-basis outstanding balance (year-end, US$ millions) is as follows.

End-2025 ASEAN breakdown (US$ millions): Singapore 138,041 / Thailand 85,251 / Indonesia 39,583 / Vietnam 31,530 / Malaysia 24,474 / Philippines 19,055. Source: Ministry of Finance and Bank of Japan, "Japan's International Investment Position," as compiled by JETRO (25fdistock01_jp.xlsx, published yen figures converted to dollars at the Bank of Japan's interbank period-end rate).

Japan's total outward direct investment balance stood at US$2.4653 trillion at end-2025. The Philippines accounts for a mere 0.77% of that, and 3.1% of the Asia total (US$617.1 billion). 注 The claim that "the Philippines is an important investment destination for Japan" is commonly heard, but in terms of balance, it remains at one-seventh of Singapore's, one-quarter of Thailand's, and 60% of Vietnam's. "6th in ASEAN" is the accurate way to phrase it, with the indicator stated explicitly.

Flows (balance-of-payments basis, net, US$ millions) are highly volatile.

Source: Same as above (country1_25cy.xlsx). After falling to US$770 million in 2024, the flow recovered to US$1.134 billion in 2025.

2-2 The Philippine side (BSP)

Net FDI inflows to the Philippines in 2025 were US$7.791 billion, down ▲17.1% from the prior year (US$9.398 billion), the lowest level in five years, since 2020 (US$6.822 billion) (BSP announcement, reported by BusinessWorld, March 12, 2026).

BSP's official comment: "For full-year 2025, equity capital placements came mainly from Japan, the United States, Singapore, and South Korea, directed toward manufacturing, wholesale/retail trade, and financial/insurance industries." Japan was the largest source of equity capital on a monthly basis for most months of 2025.

2-3 Why the figures don't reconcile

Source: JETRO, "Philippines Overview and Basic Statistics" (PSA approval basis, ₱34.0 billion in 2025 / ₱28.665 billion in 2024), Ministry of Foreign Affairs, "Philippines Basic Data" (₱57.4 billion in 2023).

These three are defined in entirely different ways. 注 In particular, the PSA approval basis represents "an amount that might be invested in the future," and must not be confused with the amount actually disbursed. Japan's approved investment amount fell ▲50.1% year-on-year in 2024, dropping to 4th place by country (JETRO, "Trade and Investment in the Philippines"), and the Japan-side flow statistics for the same year also fell, to US$770 million — a directionally consistent picture.

2-4 Number of firms operating in the Philippines and Japanese residents

注 Figures for the number of operating companies also circulate at over 1,500 (Ministry of Foreign Affairs grant-aid project overview, June 2025) and 1,630 (a summary based on 2024 survey data). Take care with the survey year and the difference between "companies" and "business bases." The number of resident Japanese nationals has reversed course, rising from 12,648 in 2024 to 13,342 in 2025, about a 5.5% increase, and appears to be in a post-COVID recovery phase.

3. ODA — is Japan the "largest donor"?

3-1 Cumulative amounts

Per Ministry of Foreign Affairs' "Philippines Basic Data" and "ODA Country Data Book 2024," Table 1, the cumulative total through FY2023 is as follows.

注Always state the "indicator" behind this cumulative figure (added in the 2026-08-26 verification)

"Japan's cumulative ODA to the Philippines of about ¥4.9 trillion" is not a yen-loan-only figure. It is the sum of yen loans (¥4,330,273 million) + grant aid (¥317,332 million) + technical cooperation actual results (¥282,327 million). If referring to yen loans alone, it must be written as ¥4,330,273 million (about 87.8% of the total). - Basis of calculation: a note in the Ministry of Foreign Affairs' "Philippines Basic Data" states that "yen loans and grant aid are calculated on an exchange-of-notes (E/N) basis, while technical cooperation is on a fiscal-year budget-expenditure-actual basis." - 注However, a note in "ODA Country Data Book 2023," Table 1-2, states that "cumulative amounts are, in principle, calculated with yen loans on a loan-agreement (L/A) basis," while grant aid remains on an E/N basis and technical cooperation on a budget-expenditure-actual basis. The stated calculation basis for the cumulative total differs between editions. Because E/N-basis and L/A-basis figures will not match exactly, the notes on the original table should be checked for any rigorous discussion (both are noted here without resolving the discrepancy). - The cumulative total on a DAC-reported basis (net disbursement basis, US$ millions) is a separate figure entirely: through 2022, government loans etc. 6,511.96 / grants 3,016.06 / technical cooperation 2,860.94 = total 12,388.96 million dollars (Data Book 2024, Table 2). The yen-basis cumulative total and the dollar-basis cumulative total are defined completely differently, so they must not be conflated.

注A fiscal-year mix-up (corrected in the 2026-08-26 verification)

The old version stated: "The cumulative total through FY2021 (ODA Country Data Book 2023) was yen loans 4,032,873 + grants 313,932 + technical cooperation 278,838 = ¥4,625,643 million. This grew by about ¥300 billion over two years." But this ¥4,625,643 million figure is actually the cumulative total through FY2022. - Basis ①: the relevant table in Data Book 2023 is headed Table 1-2, "Japan's Assistance to the Philippines by Form (Cumulative)", and the table immediately preceding it, Table 1-1, lists year-by-year actuals for FY2018–FY2022. - Basis ②: the difference exactly matches the single-year FY2023 amount. 43,302.73 − 40,328.73 = 2,974.00 (= FY2023 yen loans), 3,173.32 − 3,139.32 = 34.00 (= same-year grant aid), 2,823.27 − 2,788.38 = 34.89 (= same-year technical cooperation) [figures in ¥100 million]. - The correct statement is therefore: "the total grew by ¥304,289 million over one year (FY2023)."

Year-by-year actuals (¥100 million, ODA Country Data Book 2023, Table 1-1):

The extreme year-to-year swings are because E/N signings for large rail projects tend to cluster in particular fiscal years. 注The FY2018 actual includes one US-dollar-denominated loan, converted to yen at the then-prevailing rate (per the original table's notes).

(Reference) Ministry of Foreign Affairs' "Philippines Basic Data" notes that, by country ranking of Japan's cumulative ODA amount, the Philippines ranks 3rd, after India and Bangladesh, and that Japan is the Philippines' largest ODA donor. 注 This "3rd place" refers to the indicator Japan's cumulative ODA amount by recipient country, while the "1st place" discussed below refers to the separate indicator of calendar-year DAC donor disbursement totals.

3-2 Is Japan the largest donor — answering with the indicator and year stated

The answer is "YES, but specifically under the indicator of 'DAC donor (bilateral) disbursement totals.'"

Unit: US$ millions (gross disbursement basis, excluding aid to graduated countries; source OECD/DAC). Source: Ministry of Foreign Affairs, "ODA Country Data Book 2023," Table 3 (2017–2021), and "same, 2024" edition, Table 3 (2018–2022) — 2022 added in the 2026-08-26 verification. Total of all bilateral donors, by year: 2017: 708.31 / 2018: 1,026.03 / 2019: 1,373.93 / 2020: 1,925.12 / 2021: 2,040.49 / 2022: 1,921.42. Japan alone has accounted for 72–76% of the total in these consecutive years. 注Figures for 2023 onward are not yet included, because the latest published edition as of this verification (2026-08-26) is "Country Data Book 2024" (through 2022 actuals). It cannot be stated that "Japan ranked first as of 2026" — the accurate statement is that "Japan ranked first every calendar year through 2022."

Japan's 2021 amount was 3.4 times that of 2nd-place France and 6.8 times that of 4th-place US. In 2022, Japan was 9.4 times 2nd-place US. 注 Two caveats, however. - This table is a bilateral-donor comparison and does not include international institutions such as the Asian Development Bank (ADB) or the World Bank. ADB is headquartered in Manila and holds a large outstanding lending balance to the Philippines. It cannot be said that "Japan is the largest among all funding sources." - In the same data book's Table 4, "International Institutions' Economic Cooperation to the Philippines" (gross disbursement basis, US$ millions), the 2022 top spot is GFATM at 62.43, 2nd EU Institutions at 53.14, 3rd UNICEF at 5.11, 4th UNFPA at 4.51, 5th GEF at 4.24 — for a total of only 146.02 among international institutions. 注This is a grant-type disbursement table; ADB and World Bank "loans" do not appear in it. Do not misread this as "international institutions contribute little" (added in the 2026-08-26 verification). - China was not a DAC member at the time and does not appear in this table.

3-3 Major projects (including the latest 2025–2026 signings)

① Metro Manila Subway Project (Phase 1) The Philippines' first subway. A 33.1km, 17-station line running from Valenzuela City to Pasay City. Implementing agency: Department of Transportation (DOTr).

Terms of the 4th tranche: interest rate 0.80% (STEP applied), 40-year repayment (10-year grace period), procurement conditions are tied (Japan-tied). The 4th tranche covers funding needs from April 2027 to December 2028 (Ministry of Foreign Affairs, "Metro Manila Subway Project [Phase 1] [4th Tranche]" ex-ante evaluation report, evaluation date February 9, Reiwa 8 / published March 30, Reiwa 8; announcement of the exchange-of-notes signing by the Embassy of Japan in the Philippines). This is an exceptionally large amount for a single project in the history of Japan's yen loans. 注 On the other hand, the opening date has been reported as being pushed back from the original 2029 target, and progress figures vary by source. The accurate opening target should be confirmed via DOTr's official announcement, and this article treats it as "unconfirmed."

② Simultaneous signing on March 27, 2026 — Central Mindanao Highway Development of the Cagayan de Oro–Malaybalay section (about 65km, 4 lanes). This particular yen loan covers detailed design and other engineering services for city Section 1 (about 12km); the approved loan amount is ¥1.672 billion, interest rate 0.80%, 40-year repayment (10-year grace period), Japan-tied. Implementing agency: DPWH. The remaining sections are expected to be funded by ADB and others (JICA press release, March 26, 2026).

③ March 21, 2025 — five yen loans totaling ¥171.58 billion (Ministry of Foreign Affairs press release)

The Pasig-Marikina River Channel Improvement Project (Phase IV) covers revetment construction/improvement and dredging/widening (about 8.0km) from the lower Marikina River to Marikina Bridge, and construction of one Mangahan floodway gate, among other works. Its purpose is to reduce flood damage in central Metro Manila.

④ Davao City Bypass — a technical milestone in 2025 On April 28, 2025, the Philippines' longest road tunnel, at 2.3km, was holed through. Japanese design standards were applied to the tunnel structure and emergency facilities. Once complete, travel time from Sirawan in southern Davao City to Sasa Port in the north is expected to shorten from about 90 minutes to about 50 minutes (JICA press release, 2025). The overall project is a newly built two-lane-each-way, 29.6km road.

⑤ Philippine Coast Guard (PCG) patrol vessels "Project for Enhancement of the Philippine Coast Guard's Maritime Safety Capability (Phase 3)": approved loan amount ¥64.38 billion (E/N signed May 17, 2024; L/A signed June 10). To build five 97-meter-class multipurpose vessels. STEP applied (including joining techniques for a hybrid high-tensile-steel/aluminum-alloy structure). Interest rate 0.30% (0.20% for consulting), 40-year repayment (10-year grace). Expected completion by December 2028 (upon delivery of the 5th vessel). Japan had previously supplied 12 patrol vessels (ten 44-meter class, two 97-meter class). The Japan Coast Guard has also dispatched Mobile Cooperation Teams (MCT) under JICA's framework, providing capacity-building support such as boat-launching and towing drills.

⑥ NSCR (North-South Commuter Railway) A STEP-applied project. Covers Tutuban–Malolos–Clark International Airport (the Clark Line, about 90km) and Tutuban–Calamba (the Calamba Line, 55.6km). The Malolos-Tutuban section (2nd tranche) includes about 37.7km of mainline and procurement of 104 rail cars, among other items. 注 The completion timeline has been pushed back several times from the original plan, and this article treats the latest opening target as "unconfirmed."

⑦ Other new items in 2026 - MRT-3 (Metro Rail Transit Line 3) Rehabilitation Project (3rd tranche): ¥21.63483 billion, signed February 4, 2026 - Project for Human Resource Development Scholarship (JDS): grant aid of ¥389 million (implemented in both 2025 and 2026) - Standby loan for typhoon-damage recovery (3rd tranche), emergency assistance for the Central Visayas earthquake, and others

3-4 What is STEP (Special Terms for Economic Partnership), and why is it criticized?

Its formal name is Special Terms for Economic Partnership. Introduced in July 2002. It is a yen-loan condition designed to promote "aid with a visible Japanese face" by leveraging Japanese technology and know-how (JICA, "Special Terms for Economic Partnership (STEP)").

Its core consists of two procurement conditions. 1. The prime contractor for the main contract must be limited to a Japanese company incorporated in Japan (Japan-tied). 2. At least 30% of the total value of the main contract funded by the yen loan must consist of goods and equipment of Japanese origin (the Japan-procurement ratio).

In exchange, borrowers receive significantly preferential interest rates. As shown above, the STEP-applied Davao City Bypass 3rd tranche carries an interest rate of 0.65%, the PCG patrol vessels 0.30%, and the subway 4th tranche 0.80%, all with 40-year repayment and a 10-year grace period. Compared with the general-untied Climate Change Action Program (1.50%) or the Cavite flood management project (2.25%), the gap is stark — from the borrowing country's perspective, this amounts to a trade-off of "a cheap interest rate in exchange for using Japanese companies."

The criticism runs along three main lines. - Higher cost — because procurement is restricted to Japanese companies, competition is limited, leading to claims that similar work ends up more expensive than it would otherwise. The Ministry of Foreign Affairs itself has officially acknowledged that "developing-country partners initially had concerns that STEP might be more costly" (Ministry of Foreign Affairs, "Development Cooperation Topics"). The Ministry counters that the environment has changed as Japanese companies have expanded overseas manufacturing bases. - A retreat toward tied aid — STEP carries forward the tied nature of the special yen loans issued during the 1997 Asian financial crisis, and critics say it runs counter to the untying trend that the OECD-DAC has been pushing (International Development Journal, "Reform or Abolition? The Increasingly Tangled State of Tied Yen Loans"). - Declining competitiveness — A 2023 paper in the Journal of Japan Society of Civil Engineers argues that, measured against the aid practices of competing countries in infrastructure exports, Japan's yen-loan policy, including STEP, has not adequately kept pace with a changing environment.

注 On the other hand, cases such as the Davao tunnel breakthrough and the hybrid-structure joining technique for the 97-meter-class patrol vessels are real examples of technology that likely would not have been transferred without STEP, and the assessment is best framed as a cost-versus-technology-transfer trade-off.

4. EPA — The Japan-Philippines Economic Partnership Agreement (JPEPA)

4-1 Basic information

Source: Ministry of Foreign Affairs, "Japan-Philippines Economic Partnership Agreement" ("signed September 9, Heisei 18, entered into force December 11, Heisei 20"), Ministry of Economy, Trade and Industry, "Japan-Philippines EPA," Customs, "About the Japan-Philippines Economic Partnership Agreement." It took about two years from broad agreement to signing (reflecting ratification debates in the Philippine Senate).

4-2 The content of tariff elimination

Source: Japan Customs (Ministry of Finance), "About the Japan-Philippines Economic Partnership Agreement" (agreement overview leaflet, customs.go.jp/kyotsu/kokusai/gaiyou/philippines/gaiyou.pdf). The original text reads: "About 94% of two-way trade value becomes tariff-free / Japan's side: about 92% / Philippines' side: about 97% (based on 2003 trade data)."

注(corrected in the 2026-08-26 verification) The old version had the two reversed, stating 97% for Japan's side and 92% for the Philippines'. The correct figures are about 92% for Japan's side and about 97% for the Philippines' side. The reason Japan's ratio is lower is that sensitive agricultural/fishery items such as bananas, pineapples, muscovado sugar, chicken, and seafood were excluded from elimination, subject instead to tariff quotas or phased reduction (the banana case, "reduction rather than elimination," below, is the典型 example). Conversely, the Philippines' imports are dominated by industrial goods, resulting in a higher elimination ratio. 注This 94/92/97 figure is the value as calculated at the time of entry into force, based on "2003 trade data," and does not represent the current applied-tariff picture. Always state the indicator (trade-value basis or item-count basis, and the base year) alongside it.

Treatment of major items: - Bananas — smaller varieties (current rate 10% [April–September] / 20% [October–March]) are to have tariffs eliminated over 10 years. 注 Other varieties are subject to reduction rather than elimination, lowered over 10 years to 8% and 18% respectively at most. The claim that "the Japan-Philippines EPA eliminated the banana tariff" is a mistake, and a common one (confirmed in the original text of the customs overview document). - Pineapple (fresh, under 900g, current rate 17%) — subject to a tariff quota (in-quota rate is duty-free or reduced). 1,000 tons in year 1 → 1,800 tons in year 5. Tariff quotas are similarly set for muscovado sugar (non-centrifugal sugar in retail packaging of 1kg or less, current rate ¥35.3/kg) and chicken (excluding bone-in thigh meat, current rate 11.9%) (added in the 2026-08-26 verification). - Yellowfin tuna and skipjack (current rate 3.5%) — eliminated 5 years after entry into force. - Steel (current Philippine-side rates 0–15%) — immediate tariff elimination for 60% or more of the "volume" of Japan's exports (including tariff-quota allowances for hot-rolled and cold-rolled steel sheet, etc.). Beyond immediate elimination, steel products such as bolts and kitchenware are to be eliminated within 10 years (the 2026-08-26 verification clarifies that the "over 60%" figure is on an export-volume basis). - Automobiles (current Philippine-side rate 30%) — (corrected in the 2026-08-26 verification) Finished vehicles over 3,000cc are to have tariffs eliminated in principle by 2010 (subject to renegotiation from 2009 onward, but eliminated by 2013 at the latest even then). Finished vehicles of 3,000cc or less are to have the rate reduced to 20% by 2009, subject to renegotiation. 注The old version stated "under 3,000cc renegotiated in 2009, and above that eliminated 2010–2013," an inaccurate mapping of category to treatment. Parts not produced domestically are eliminated immediately. - Renegotiation clauses at 3–5-year intervals are built into multiple sectors.

4-3 Movement of natural persons

JPEPA recognized temporary entry for six categories of natural persons (short-term business visitors, intra-corporate transferees, independent professionals, nurses, certified care workers, and contract-based natural persons). This is the framework under which Japan first agreed, at the treaty level, to accept "nurses and certified care workers" (alongside the Indonesia EPA), marking a turning point in the history of Japan's foreign-worker policy.

4-4 Momentum for revision in 2026

At the May 28, 2026 summit meeting, the two leaders agreed to move forward on considering an upgrade (expansion) of both the Japan-Philippines EPA and the Japan-ASEAN Comprehensive Economic Partnership (AJCEP). Prime Minister Takaichi expressed support for the Philippines' accession to the CPTPP (Ministry of Foreign Affairs, May 28, Reiwa 8). A new tax treaty was signed the same day (in Tokyo, by Ambassador Kazuya Endo and Philippine Ambassador to Japan Mylene J. Garcia-Albano). Substantive agreement was reached on February 4, 2026. Dividend withholding tax is set at 5%/10%/15% depending on ownership share (5% for 90%-plus ownership held for six months or more), royalties are reduced uniformly to 10%, and an arbitration mechanism was introduced (if the tax authorities of the two countries fail to resolve a dispute through consultation within two years, it is referred to a decision by a third-party arbitration panel). The existing treaty took effect in 1980 and was amended by a protocol in 2008 (Ministry of Finance, "New Tax Treaty with the Philippines Signed," May 28, 2026). Entry into force requires approval by Japan's Diet.

注 Note that before the May 2026 summit meeting, the Nikkei reported that delays in Philippine value-added tax (VAT) refunds are acting as a barrier to Japanese companies' expansion. The gap between formal incentives and practical cash-flow realities is an important checklist item when considering entering the market.

5. Nurse and certified-care-worker candidates — 18 years of results

5-1 Cumulative number accepted

Cumulative arrivals in Japan, FY2008–FY2025 (JICWELS, "On the Acceptance of EPA Nurse Candidates Coming to Japan in FY2026")

10,000 people over 18 years. An average of just over 550 people a year — a figure that remains largely symbolic relative to the scale of Japan's care-worker shortage.

5-2 Program framework (for the Philippines)

After qualifying (as an EPA nurse or EPA certified care worker), there is no limit on the number of times a residence-status renewal can be granted, a change of institution is permitted, and a spouse and children may accompany. This is the biggest incentive.

5-3 National exam pass rates — a number worth confronting directly

"Pass rate by fiscal year of arrival, cumulative" for EPA nurse candidates (JICWELS, arrivals FY2017–FY2023, regardless of the fiscal year of passing)

JICWELS itself notes that "first-time test-takers pass at a rate in the low single digits, second-time takers in the 20% range, but from the third attempt onward the pass rate rises to the 40–50% range." 注 In other words, it is a mistake to evaluate the program by isolating "the first-attempt pass rate is a few percent" — it should be understood as a program in which 40–50% eventually pass over the course of 3–4 years.

Certified care worker national exam (FY2025, 38th exam, announced by the Ministry of Health, Labour and Welfare on March 16, 2026) - Passers among candidates from the three EPA countries: 380 people, pass rate 31.8% (the lowest since EPA candidates began sitting the exam in FY2011) - By country: Indonesia 185, Vietnam 103, Philippines 92 - The prior year's figure was 498 — a decline of ▲24% - For reference, the same sitting overall: 78,469 test-takers, 54,987 passers, pass rate 70.1%

A Ministry of Health, Labour and Welfare official cited, as one factor behind the decline, "an increase in foreign nationals working in care settings under other residence statuses such as Specified Skilled Worker." This suggests the EPA route is being displaced by the Specified Skilled Worker track.

Nurse national exam (115th sitting, held February 15, 2026, results announced March 24): overall, 59,614 test-takers, 52,666 passers, an 88.3% pass rate. 注 The Ministry publishes an EPA-candidate breakdown separately, but this article was unable to reach the primary source for the 115th sitting's breakdown, so it is treated as "unconfirmed."

5-4 Retention rate

注 No officially defined government statistic on "retention rate" could be confirmed within the scope of this article's research. JICWELS operates site visits to receiving institutions and a consultation desk, but no dataset tracking continued employment after qualification on an ongoing basis could be found. Whenever a "◯% retention" figure is cited, always confirm the source and the definition (how many years after qualification, whether returnees are included in the denominator). This article treats it as "unconfirmed."

5-5 FY2025 arrival matching

Philippine nurse candidates: 35 openings, 35 applicants, 27 matched → a 77.1% match rate (up sharply from 48.8% in FY2023 and 42.9% in FY2024). JICWELS notes that "for FY2025 arrivals, the number of Philippine applicants more than doubled from the prior year, and the match rate also rose." A reversal in the weak-peso/weak-yen dynamic, or a perceived surplus of nurses within the Philippines, may be contributing factors, but this article cannot pin down the cause.

6. People-to-people exchange

6-1 Filipinos residing in Japan

Source: Immigration Services Agency of Japan, "Number of Foreign Residents as of the End of Reiwa 7 (2025)."

National totals by residence status (end of 2025): Permanent Resident 947,125 / Engineer/Specialist in Humanities/International Services 475,790 / Student 464,784 / Technical Intern Trainee 456,618 (up just 23 from the prior year, essentially flat) / Specified Skilled Worker 390,296 (up 105,830 from the prior year).

注 A breakdown of Filipino nationals by residence status can be obtained from e-Stat's "Statistics on Foreign Residents" tables (by nationality/region × residence status), but this article was unable to reach the original table, so the breakdown of Filipino permanent residents, long-term residents, and spouses of Japanese nationals is treated as "unconfirmed." However, given the historical background (entertainer visas from the 1980s onward, spouses of Japanese nationals, and Nikkei-jin), it is worth keeping in mind that, unlike other major sending countries, the Philippines has a comparatively heavy weighting toward "permanent residents, long-term residents, and spouses of Japanese nationals."

6-2 Specified Skilled Worker

Number of Filipino Specified Skilled Worker residents (Immigration Services Agency, "Status of Operation of the Specified Skilled Worker System," preliminary figures)

Top nationalities as of end-December 2025: Vietnam 164,352 (42.1%) / Indonesia 86,955 (22.3%) / Myanmar 44,523 (11.4%) / Philippines 35,862 (9.2%) / China 22,105 (5.7%). Two notable points: Myanmar has overtaken the Philippines to move into 3rd place, and the Philippines' share has steadily eroded, from 9.9% → 9.7% → 9.2%. The absolute number is growing, but the share is shrinking.

注 For Specified Skilled Worker (ii) (end of December 2025), Vietnam accounts for 5,855 (73.6%) versus just 341 for the Philippines.

6-3 Technical Intern Training

Filipinos among technical intern trainees are reported at 40,348, ranked 3rd, at about 9% as of end-June 2025. 注 This article was unable to reach the Immigration Services Agency's original table, so this is treated as "primary source not yet reached." Notably, in the Philippines, trainees are legally prohibited from bearing the cost of fees to sending agencies, with the receiving company bearing that cost instead — a structural feature that keeps the risk of debt-driven disappearance low (the disappearance rate was about 1% of the total in 2024 data).

6-4 A Philippine-specific procedure — MWO/DMW

When hiring a Filipino worker, in addition to Japan's own residence-status procedures, a procedure on the Philippine government side is mandatory. If this is overlooked, accidents occur where a residence status is granted but the person cannot leave the Philippines, or cannot re-enter after a temporary trip home.

Important regulations: - Following a 2018 reform, "Direct Hiring" — a Japanese company recruiting and hiring directly within the Philippines — is prohibited in principle. Going through a DMW-accredited sending agency is the rule. - Collecting a security deposit or setting excessive penalty clauses violates the bilateral Memorandum of Cooperation (MOC) between Japan and the Philippines and is illegal. Do not contract with a sending agency that does this. - Intermediary costs are, in principle, borne by the company. - The MWO/DMW procedures alone typically take 2–4 months, and the time to the start of employment should be estimated at about 4–9 months for a first-time case.

6-5 The 2027 system transition — the Employment for Skill Development program

Under the amended law promulgated on June 21, 2024 (Act No. 60 of Reiwa 6), the Technical Intern Training program is being developmentally dissolved, and the "Employment for Skill Development" (Ikusei Shuro) system is scheduled to take effect on April 1, 2027. The Technical Intern Training Act will be renamed the "Employment for Skill Development Act."

Key changes relevant to the Philippines: - A new bilateral arrangement (MOC) with each sending country will be concluded, and acceptance will, in principle, be limited to countries with an MOC in place. The Philippines already has an existing MOC and its own DMW-based regulatory regime, so how the MOC is renegotiated and operated under the new system will be a key point to watch. - A transfer to a different receiving institution after 1–2 years at the same institution will, in principle, be allowed (a significant relaxation from Technical Intern Training's default prohibition). - After completing 3 years of Employment for Skill Development, a worker who meets the skill and Japanese-language standards may move to Specified Skilled Worker (i). - Japanese-language requirements will be set in three stages: "before entry," "at the one-year mark," and "at the time of transition to Specified Skilled Worker."

Preparations have been proceeding in stages since 2026 (applications for supervising/support organization licenses opened April 15, 2026; applications for approval of Employment for Skill Development plans opened September 1, 2026). 注 The operational guidelines were published February 20, Reiwa 8, and partially revised April 6; they remain subject to change through future ministerial ordinances and notices.

7. 2026 — the 70th anniversary of normalized diplomatic relations

On July 23, 1956, the Treaty of Peace with Japan (San Francisco) and the Japan-Philippines Reparations Agreement took effect, normalizing relations between the two countries. 2026 marks the 70th anniversary of that event.

Source: Ministry of Foreign Affairs, "Decision of the Commemorative Logo for the 2026 Japan-Philippines Friendship Year (70th Anniversary of Normalized Diplomatic Relations)," Embassy of Japan in the Philippines special page.

The greatest achievement of the 70th-anniversary year was the May 28, 2026 summit meeting described above. Its economic agreements included the following. - Elevation to a "Comprehensive Strategic Partnership" (a first for the Philippines with any country) - Signing of a new tax treaty - Consideration of upgrading the Japan-Philippines EPA and AJCEP, support for the Philippines' CPTPP accession - Emphasis on "quality infrastructure development": connectivity, disaster prevention, health, human resources, and the Luzon Economic Corridor - Strengthening the resilience of energy and critical-minerals supply chains (the "Power Asia" initiative, AZEC cooperation) - A shared concern over economic coercion - According to Nikkei reporting, Japan is to support strengthening the Philippines' petroleum reserves (a planned team led by METI together with ERIA, JOGMEC, JBIC, and JICA)

8. Summary — three asymmetries the numbers reveal

1. Trade is "balanced" but "asymmetric" — the amounts are nearly equal (both around US$10.4 billion in Japan's own statistics), yet the Philippines ranks only 16th–19th for Japan, while Japan ranks 2nd–3rd for the Philippines. The weight each country carries for the other differs by more than threefold.
2. Investment: "Japan is the largest source" yet "small for Japan" — BSP explicitly names Japan as the top source of equity capital, yet the Philippines accounts for only 0.77% of Japan's outward direct investment balance, ranking 6th within ASEAN.
3. ODA is overwhelming, but has not fully converted into private investment — a cumulative total of about ¥4,929.9 billion (indicator = the sum of yen loans, grant aid, and technical cooperation, through FY2023; ¥4,330.273 billion for yen loans alone), consistently ranked 1st among DAC donors on a disbursement-total basis through calendar year 2022. Yet practical challenges — delays in subway and rail projects, and the backlog in VAT refunds — stand in the way of converting the depth of public funding into a comparable depth of private investment. Whether that conversion progresses is the central question for the late 2020s, following this 70th-anniversary year.

日本語の詳細版: 分野「経済・産業・ビジネス」「日比経済関係の詳細」（本サイト日本語版）。