ASEAN to benefit from Japan reconstruction

Manila Bulletin

MANILA, Philippines - Although ASEAN businesses are expected to benefit from the huge $300-billion reconstruction program of Japan, they also expect a slowdown in the manufacturing sector until a clearer picture appears on how Japan would address the impact of the gargantuan catastrophe.

This was pointed out at the presentation of the ASEAN business survey by the ASEAN-Business Advisory Council (ASEAN-ABAC).

Businessman Manuel V. Pangilinan, the Philippine representative to ABAC, said the expected slowdown in the manufacturing sector especially for those import dependent on Japanese goods would depend on how quick Japan could get back on its feet.

''Our manufacturing sector is expected to slowdown in the course until a clearer picture appears on how Japan would address the awesome disaster because business people do not want uncertainties,'' he said.

But Pangilinan said that the enormous task of reconstruction in Japan and its pronouncement to maintain its investments in ASEAN are offsetting factors to the adverse impact of the crisis.

He said that those with heavy components from Japan would be affected because prices are likely to rise, but the mining sector is going to benefit as the collateral effect of rising oil, heightened inflation and interest rates.

Teresita Sy-Coson, another ABAC Philippine representative and vice-chair of SM Investments Corp., said the retail and property sectors are not feeling yet the Japan and the Middle East crisis.

''We are not feeling yet the impact, those with businesses with Japan will be affected but even without the unfortunate Japan disaster prices of fuel and commodities have been going up,'' Coson said.

Coson said the Philippines retail and property sectors have remained robust because of the strong domestic consumption.

There is no likelihood that food sector would be affected, she said, although the electronics sector is likely to suffer the impact of the quake and tsunami.

There is no panic buying also, although there have been an interesting demand for flashlight and batteries.

A representative from Thailand said that while the Japan catastrophe was very unfortunate, ASEAN should position itself for the opportunities arising from the crisis.

''The opportunity lies in the export of more goods, especially food,'' the Thai businessman said.

A Singaporean businessman also noted that ASEAN companies can help to support the supply chain in Japan.

He, however, said the strategy would force Japan to become a more open economy.

''We have to take a strategic position in this kind of a situation,'' he said.

A Vietnamese businesswoman said that Japan's $300 billion reconstruction program would create opportunities for Japanese firms to move factories to ASEAN.