Philippines begins to feel impact of "Abenomics": central bank

The Philippines is beginning to feel the positive effects of Japanese Prime Minister Shinzo Abe's economic policies, dubbed "Abenomics," central bank governor Armand Tetangco said Friday.

In a forum with the Foreign Correspondents Association of the Philippines, Tetangco said Japanese investment in the country's manufacturing sector has increased as well as bilateral trade.

He attributed the developments to "an expected improvement in Japanese economic performance, plus, of course, the enhanced attractiveness of the Philippines to foreign investors."

"We're seeing part of (the benefits) already. But the bulk of the effects of this policy will depend on how the (Japanese) economy will perform in the near future," Tetangco said.

Abenomics includes drastic monetary easing, massive fiscal spending and an economic growth strategy that Abe introduced to expand Japan's shrinking economy.

Japan is likely to influence the Philippine economy further, Tetangco said, as the country's exports to Japan are increasing and investment from Japan is growing.

During the first six months of this year, Japan was the largest importer of Philippine products, worth $5.19 billion, while Philippine imports from Japan amounted to $2.61 billion, making Tokyo the third biggest exporter to the Philippine market.

Japan is the second largest investor in the Philippines, after the United States, investing 4.2 billion pesos (around $97.6 million) in the second quarter of 2013.

"What is encouraging is that the performance of the Japanese economy so far, particularly consumer spending, shows that Abenomics seems to begin to work. So there's been an increase in confidence, there's been an increase in spending," he said.

Japanese Ambassador to the Philippines Toshinao Urabe told Kyodo News in an interview last month that he is "quite sure that people are now thinking more about dealing with Japan and what kind of business opportunities they have," given the confidence about the future of the Japanese economy.

Japan and the Philippines have an economic partnership agreement that came into force in December 2008.