Low and stable labor costs in the Philippines are attracting Japanese companies to set up shop in the Philippines. One in particular, the electronics company Epson is building its biggest manufacturing plant in Batangas, aside from its existing facilities.

The new factory is expected to employ 20,000 workers once completed in 2017.

“I think the Philippines has one of the most competitive labor cost sin the region,” Epson Philippines country manager Toshimitsu Tanaka told reporters in an interview last week.

Tanaka said that the labor force in China is now becoming saturated and more expensive, adding that the same is also true in Indonesia, which hosts the company’s second largest plant with 10,000 employees manufacturing inkjets and projectors.

“Based on the current situation, we have no plans to expand the China factory because of labor costs. China’s labor force very, very high by almost 20 percent (compared to the Philippines),” Tanaka said. “The Philippine labor cost is stable so we can predict salary.”

Aside from having a large and cheap labor force, the English proficiency of Filipinos is also a big advantage compared to Chinese and Indonesians, Tanaka said.

The expansion of the plant in Lipa, which today has 12,500 employees, is expected to cost 12.3 billion yen or about P4.6 billion.