Six Japanese wiring harness firms to make investments in the PH worth ₱10.5 billion and create up to 18,650 jobs

Six Japanese wiring harness firms are investing in the country with estimated investments of ₱10.5 billion and the creation of up to 18,650 jobs, according to Trade and Industry Secretary Ramon M. Lopez.

His announcement is based on a report by Commercial Counselor and Special Trade Representative Dita Angara-Mathay, who leads the DTI Field Office in Japan.

The online sector-specific roundtable organized by the Philippine Trade and Investment Center in Tokyo saw the participation of senior executives from Sumitomo Wiring Systems, Ltd. and Yokowo Co., Ltd., among others.

Mathay reported that of 6 participating Japanese firms, two are new investors, two have confirmed expansion projects, and the remaining two are still completing their expansion and diversification plans.

“The rise of new factories with new high-tech products and jobs will not only enhance economic activities in regions outside of NCR but will also decongest it,” said Lopez.

Lopez also discussed the benefits of the new Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act for wiring harness operations in the country.

He said given its potential for job creation, support of a sector critical to industrial development, opportunity to create value through innovation, fostering a competitive advantage in global manufacturing and the export market, investment in wiring harness production is labeled as Tier I under CREATE.

Export-oriented industries that qualify under Tier I may avail of ten years of special corporate income tax rates, or enhanced deductions.

This is in addition to four years of income tax holiday (ITH) for industries located In the National Capital Region (NCR), five years for those in metropolitan areas or areas contiguous and adjacent to NCR, and six years for all other areas.

The Philippines is the fourth largest exporter of wiring harnesses to the world. In 2020, the Philippines exported $1.886 billion worth of wire harnesses to the world. Japan was the biggest market for Philippine wire harness exports followed by the United States of America, South Korea, Canada, and Thailand. Wire harness exports to Japan were worth $857 million and comprised 45.44% of the country’s total wire harness exports.

The automotive wiring harness market is expected to surpass $93 billion by 2023. The demand for greater fuel efficiency and electric vehicles is expected to continue to fuel this growth.

“With wiring harness applications expanding beyond the automotive industry to the telecommunications, aerospace, medical fields, and other ICT areas, support for upgrading Philippine-based wiring harness operations have become all the more imperative,” said Lopez.

SOURCE: Manila Bulletin