MANILA, Philippines – The Philippines has overtaken Thailand and Vietnam as the investment destination of choice in Asia among Japanese companies diversifying beyond China, a ranking official of the Japan External Trade Organization (Jetro) told The STAR.

In an interview during his recent visit to the country, Jetro executive vice president Tatsuhiro Shindo said the Philippines has moved up on the Japanese investors’ list of their  most favored destinations in Asia.

The country is now officially the “plus one” of Japan as it embarks on a China Plus One Strategy, he said.

“Yes, (the Philippines) is on top of our list. It used to be Thailand and Vietnam. But most recently it has become the Philippines,” Shindo said.

“Japan’s outlook to the Philippines is very positive and very favorable because the Philippines is showing such a steady growth. It is so attractive, especially compared with the other ASEAN (Association of Southeast Asian Nations)-member countries recently,” he added.

With China’s recent economic slowdown, Shindo said Japan is applying the China Plus One Strategy to the Philippines given the country’s sustained economic growth.

The China Plus One Strategy is aimed at spreading Japan’s investments outside the world’s second largest economy.

“Japanese companies used to rush to China, but China’s economy was kind of sluggish as of late and Japan investors start to think about diversifying their investments to other countries. A couple of years ago, China Plus One means China plus Thailand or China plus Vietnam, but recently, we are pushing more for China Plus One means Philippines,” Shindo said.

Foreign chambers in the Philippines have already dubbed the country as the next big investment hub in Asia as investors exit China due to rising costs, increased regulation, and an economic slowdown.

Shindo headed last week an investment mission from Japan which included small and medium-sized manufacturing enterprises seeking investment opportunities in the country.

Shindo said the Japanese government and companies only have praises for the Philippine Economic Zone Authority (PEZA).

“We have no concerns (in doing business in the Philippines), especially with PEZA. This is such a great institution. It gives us such a strong protection to Japanese investors and good incentives. Since PEZA offers very great incentives for Japanese companies, no need to make investment outside PEZA or anywhere else,” he said.

Accumulated investment from Japan to the Philippines to date has reached P460 billion, higher than the roughly P300 billion from the United States, Shindo said.