Murata to invest P40 B for new Batangas facility

The local unit of Japanese electronic components maker Murata Manufacturing Co. Ltd. plans to invest P40 billion to build a new facility in Batangas, the Philippine Economic Zone Authority (PEZA) said.

The expansion of Philippine Manufacturing Co. of Murata Inc. (PMM), however, is hinged on the outcome of the proposed second package of the government’s tax reform program, the Tax Reform for Attracting Better and HighQuality Opportunities (TRABAHO) bill or Tax Reform for Acceleration and Inclusion (TRAIN) 2.

“Murata is expanding with an additional investment of P40 billion in their present 20 hectares at FPIP (First Philippine Industrial Park),” PEZA director general Charito Plaza said in a text message yesterday.

She said the firm applied for the expansion with PEZA, but had also asked to put it on hold until the TRAIN 2 results are clear.

Under TRAIN 2 or the TRABAHO bill approved by the House of Representatives on third and final reading, the corporate income tax (CIT) rate is expected to gradually decline to 20 percent from the current 30 percent.

Among the changes in the incentives regime under the TRABAHO bill is the removal of the five percent tax on gross income earned (GIE) paid in lieu of all national and local taxes by PEZA-registered firms after availing of their income tax holidays.

The five percent GIE has been considered a crucial incentive for firms seeking to locate at PEZA zones.

However, the finance department wants to modernize the incentives regime as it considers the current system of providing five percent GIE even to firms which have failed to generate more jobs or contribute to the economy unfair.

About 90,000 small and medium enterprises are paying a CIT of 30 percent which is considered to be highest in the region.

Should PMM decide to proceed with its expansion plan, the investment would be used to build a third facility at FPIP, Plaza said.

The expansion will allow PMM to hire an additional 6,000 workers to its 2,984 workforce.

PMM is engaged in the production of multi-layer ceramic capacitors or components in electronic devices which store and release electrical energy.

The firm, which started operations in the Philippines in 2013, is Murata’s largest production site in Asia.

PMM has annual sales of P5.65 billion.

Apart from PMM, Murata has 96 subsidiaries, with 31 located in Japan and 65 in other countries.