Approved investment pledges jump to P172.7 billion

MANILA, Philippines — Foreign investment pledges approved by investment promotion agencies (IPAs) surged by a dramatic 1,823 percent in the first quarter from a year ago, driven by a large investment commitment in renewable energy.

Data released by the Philippine Statistics Authority (PSA) yesterday showed total foreign investments approved by IPAs reached P172.70 billion from January to March, much higher than the P8.98 billion in the same period last year.

These investment pledges were approved by IPAs such as the Board of Investments (BOI), Clark Development Corp., Philippine Economic Zone Authority and Subic Bay Metropolitan Authority.

There were no foreign investment approvals for the first quarter, according to the PSA.

Of the IPAs, the BOI accounted for the biggest share of approved foreign investments in the first quarter amounting to P165.36 billion.

When sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said in an email yesterday that the sharp increase in approved foreign investments in the first quarter could be attributed to the large renewable power or energy investment from Germany of about P156.96 billion.

By country source, the PSA said the bulk of the foreign investment pledges in the first quarter came from Germany with a 90.9 percent share amounting to P156.96 billion.

This was followed by Japan with a 2.2 percent share or P3.82 billion, and the Netherlands with 1.5 percent or P2.65 billion.

In terms of industries, electricity, gas, steam and air conditioning supply received the largest amount of foreign investment pledges with 90.9 percent or P156.96 billion of the total in the first quarter.

Manufacturing placed second with a 6.1 percent share or P10.49 billion worth of foreign investment commitments, while administrative and support service activities came in third with a 2.1 percent share or P3.59 billion.

The top three regions set to receive the highest share of approved foreign investments are Western Visayas with 68 percent or P117.38 billion, followed by CALABARZON with 27.5 percent or P47.47 billion, and Central Luzon with 1.9 percent or P3.28 billion.

Approved investments from foreign and Filipino nationals rose 151.8 percent to P480.36 billion.

Should the investment pledges in the first quarter proceed, these are expected to generate a total of 25,453 jobs, with 76.3 percent to be absorbed by foreign investment projects.

“For the coming months, foreign investments could still increase as the economy reopened towards greater normalcy and amid some of the investment commitments obtained by the administration after foreign trips in recent months,” Ricafort said.

He said the country’s economic growth, which is expected to be among the fastest in the region, attractive demographics, and the economic reopening of China are also likely to help drive more foreign investments to the Philippines.

“Membership of the country into the Regional Comprehensive Economic Partnership (RCEP), which is the world’s biggest free trade agreement and led by China (the world’s second biggest economy), would help attract more foreign investments or FDIs (foreign direct investments) to locate in the country as a production and/or marketing base, as well as an access point to bigger export markets of the other RCEP member countries in the region and in other parts of the world,” he said.