MANILA – Ayala Corporation Chairman Jaime Augusto Zobel de Ayala is keen to continue exchanging ideas and investing resources with Japanese firms to accelerate a strong and sustainable recovery from the COVID-19 pandemic through innovation and digitalization.
At the 38th Joint Meeting of the Philippines-Japan Economic Cooperation Committees held Monday, Zobel shared thoughts alongside DTI Secretary Ramon Lopez and Japanese business leaders Ken Kobayashi of Mitsubishi Corporation, Teruo Asada of Marubeni Corporation, and Nobuhide Hayashi of Mizuho Bank, Ltd.
“The Philippines and Japan have always maintained a strong economic partnership even during this pandemic,” Lopez said. “In this partnership, innovation and digitalization now play a key role—as both our countries continue to encourage globally competitive and innovative industries at this crucial stage of recovery.”
“Japan has been the largest foreign investor in the Philippines for the last two decades, with more than 1,400 Japanese companies presently operating in the country,” Kobayashi said. “I’m grateful for this strong and growing relationships between our two nations that will bring economic growth for both.”
During his speech, Zobel cited the Ayala group’s long-standing strategic partnerships with Japanese firms, notably Mitsubishi Corporation since 1974; and highlighted three key areas of outsized potential for co-investment between Japanese and Philippine firms to drive recovery and growth in the new normal. “We often look to Japan, with its history and leadership in innovation, as a source of inspiration for the forward-thinking and novel ways in which technologies can be applied to address pain points and create value for business and society alike,” Zobel noted.
Access to Healthcare
First in Zobel’s list is healthcare, a traditionally underserved market in the Philippines, which has been most critical during the pandemic.
“Globally, the pandemic has exposed woeful inadequacies in healthcare infrastructure,” Zobel said. “Our experience with HealthNow–Ayala Group’s all-in-one healthcare platform—and COVID illustrates the need for systematic investment in innovation and digitalization to address challenges faced by our healthcare system.”
According to Zobel, while the Philippines produces the best healthcare workers in the world, the country’s physical and digital healthcare infrastructure requires substantial stimulus, which can be provided by a collaborative effort between the private and public sectors.
Another opportunity for PH-Japan collaboration is financial inclusion. As both BPI Mobile Banking and GCash generated record-high transactions during the pandemic, Zobel invites Japanese firms to look at these channels, citing Paypal’s $2.7B deal with Paidy.
“Considering Paidy’s ‘buy now, pay later’ model, there are many analogues that we can possibly borrow from this— perhaps on exploring ways around how we might adapt learnings from Japan to the needs of our own young market that has a sub-10% credit card penetration rate,” he said.
“We have much to learn from the approaches and models of our Japanese counterparts, and we hope that further success stories might arise from continued cooperation to transform this space,” he added.
During the pandemic, BPI saw its transactions swing to digital. With 92% of transactions now done online, the platform recorded over 4 million digital enrollments, with over 2.5 million digitally active users. Meanwhile, GCash has experienced over 280% growth in daily active transactions year-on-year, and nearly +1,000% growth from pre-pandemic levels. The GCash App now has 46 million downloads.
Green Energy Shift
Finally, Zobel echoed the global call for a shift to green energy development, which the Ayala Group is addressing through AC Energy.
With Japan being recognized for designing and building infrastructure resilient to natural disasters, Zobel said the Philippines can borrow technologies and practices from Japan to build a more resilient and adaptive grid.
Zobel also touched on Japan’s pioneering efforts in the liquefied hydrogen space, which has tremendous implications for accelerating green energy transitions in the automotive space, and for the scalability of clean energy generation and storage vis-à-vis fuel cell technology.
“Japan is certainly well on its way with its Green Growth Strategy by investing in these technologies, with hopes to achieve 40% of its national mix generated by renewable sources by 2030. There is much we can continue to learn from Japanese leadership in this field— disaster-resilient energy infrastructure and cutting-edge carbon-free fuels being just the tip of the iceberg,” he said.
AC Energy aims to be the largest listed renewable platform in Southeast Asia, with a goal of producing 5GW of attributable renewable capacity by 2025.
According to Zobel, Ayala’s longstanding partnership with Mitsubishi Corporation—which has supported Ayala at the holding company level as well as in Manila Water, AC Energy, and Ayala Land—is a testament on how Philippine firms can work with Japanese firms to scale up and innovate.
“I believe there is much room for further cooperation and investment in innovation and digitalization between the Philippines and Japan,” he said. “Combining our resources and experiences will surely yield innovative ways of addressing the challenges posed by a more volatile, uncertain, complex, and ambiguous world that demands more digital and inclusive means of serving our stakeholders,” he added.
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