Locals dominate investments in Q1 as foreigners defer projects

MANILA, Philippines — Uncertainties due to the pandemic remain an issue as the Philippines continues to fail in attracting foreign investors in the country amid the recent surge in COVID-19 cases and slow rollout of vaccines.

Latest data from the Philippine Statistics Authority (PSA) showed foreign firms have yet to pour in much-needed capital to revive the economy as only investments from Filipino nationals registered improvement.

Approved foreign investments in the first quarter dipped to P19.55 billion, down 33 percent from the 2020 level of P29.14 billion.

However, total investments from both foreigners and Filipinos went up 42.5 percent to P165.16 billion. Almost 90 percent of this came from local investors.

Foreign investment commitments were filed at the Board of Investments (BOI), Clark Development Corp., Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority, Authority of the Freeport Area of Bataan and Cagayan Economic Zone Authority.

CALABARZON received the biggest chunk of foreign investments at P7.54 billion in the first three months of the year. Some P2.73 billion went to Central Visayas while Metro Manila got P1.74 billion.

Out of the 17 regions in the country, five failed to secure any foreign investment: the Cordilleras, Ilocos, Zamboanga Peninsula, Soccsksargen and the Bangsamoro region.

About 62 percent of the investments were coursed through PEZA at P12.19 billion, followed by the BOI at P6.84 billion.

Among industries, manufacturing garnered the highest share at 57 percent with foreign investments worth P11.14 billion. Information and communication came in second with P4.58 billion in investments.

Real estate activities ranked third with P2.24 billion in investment pledges.

No foreign investment poured into agriculture, forestry and fishing, water supply, sewerage and waste management, accommodation and food service activities, public administration and defense, education, human health and social work activities, and arts and entertainment.

The hard-hit industries of accommodation, food service, arts and entertainment and even education have yet to secure investments as restrictions remain in place in these sectors.

Overall, however, electricity, gas, steam and air conditioning supply secured the largest share at P122.45 billion or nearly 75 percent of total.

According to the PSA, the investment commitments were mainly driven by Japanese projects, which accounted for 54.8 percent of total, followed by Cayman Islands which comprised 5.8 percent, and companies from South Korea which had a three percent share.

Businesses from Japan committed investments totaling P10.72 billion, while those from Cayman Islands pledged P1.14 billion. Those from South Korea, meanwhile, pledged a total of P593 million.

The approved investments of foreign and Filipino nationals in the first quarter created 23,472 jobs, down 35 percent from the 36,130 jobs created in 2020.

Of these, 78.5 percent will be absorbed by projects with foreign interest, with manufacturing expected to produce the most number of jobs.