PEZA turns tariff risk into pitch for Japanese investors

The Philippine Economic Zone Authority (PEZA) is framing the upcoming 19 percent reciprocal tariff on Philippine exports to the United States as a competitive advantage in its efforts to revive declining Japanese investments.

Set to take effect on August 7, the tariff rate is among the lowest in Southeast Asia—tied with Indonesia and only behind Singapore’s 10 percent—making Philippine exports relatively more attractive under current trade conditions.

PEZA Director General Tereso Panga said the country’s lower tariff exposure could enhance its appeal as a hub for foreign direct investments and exports.

“More so with its projected 5.5 percent GDP growth rate this year—that will sustain the country as consistently one of the best-performing economies in the region,” Panga said.

The message formed part of PEZA’s investment promotion campaign during a recent mission to Japan, where officials engaged Japanese firms and chambers to reverse what Panga described as the “dismal performance” of Japanese ecozone investments this year.

From January to July 2025, Japanese investments approved by PEZA totaled P2.17 billion, down 73 percent from the same period last year. Japan ranked fourth among ecozone investor countries, behind South Korea (P10.77 billion), the United States (P3.24 billion), and China (P2.62 billion).

In an effort to attract fresh capital, PEZA partnered with Science Industry Park of the Philippines Inc. (SPPI) and held investment seminars in Osaka, Nagoya, and Tokyo. Panga outlined benefits available under the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

Among the potential expansions discussed during the forums were projects from existing PEZA locator Tsuchiya Kogyo Phils. Inc., which is planning to expand at Light Industry and Science Park IV in Batangas. Another prospect is HRD Group, a major Japanese producer of prefabricated greenhouses and wooden homes, currently operating in the Cavite Economic Zone.

HRD Group aims to increase its annual exports of wooden house units to Japan from 20,000 to 25,000 as part of its proposed expansion.

PEZA said it would continue efforts to position the Philippines as a competitive manufacturing and export base for Japanese firms seeking reliable access to Western markets under a shifting global trade landscape.