Foreign investment pledges more than double

MANILA, Philippines — Foreign investment pledges approved by investment promotion agencies (IPAs) surged by more than 127 percent to P394.45 billion in the fourth quarter of 2023 from P173.61 billion a  year ago amid the country’s strong economic performance, according to the Philippine Statistics Authority (PSA).

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the latest improvement in the approved foreign investment data may have to do with improved economic and financial markets performance in recent months, as well as easing inflation.

“Philippine economic growth is among the fastest in ASEAN (Association of Southeast Asian Nations) or Asia and long-term US and local interest rates have already eased since November 2023, thereby encouraging more foreign investments  to come into the country amid favorable demographics and lower long-term interest rates that help boost investments globally, including foreign direct investments into the country,” he said.

He said the increased foreign investments could also be from some realized investment commitments made during the various foreign trips of President Marcos.

The latest  investment figures were approved by the following IPAs: Authority of the Freeport Area of Bataan, Board of Investments (BOI), Clark Development Corp., Philippine Economic Zone Authority and Subic Bay Metropolitan Authority.

“No foreign investment approvals were reported by the Bases Conversion and Development Authority, BOI-Bangsamoro Autonomous Region in Muslim Mindanao, Cagayan Economic Zone Authority, Clark International Airport Corp., John Hay Management Corp., Poro Point Management Corp., Tourism Infrastructure and Enterprise Zone Authority and Zamboanga City Special Economic Zone Authority,” the PSA said.

Of the total approved foreign investments for the fourth quarter of 2023, Netherlands accounted for the highest investment commitment amounting to P345.76 billion or 87.7 percent.

This was followed by Japan at P31.37 billion for an eight percent share and Singapore at P4.99 billion or 1.3 percent.

By sector,  the electricity, gas, steam and air conditioning supply industry received the largest amount of approved investments at P335.87 billion or 85.1 percent of the total.

Among the regions in the country, Bicol received the largest share of foreign investment pledges amounting to P162.92 billion or 41.3 percent of the total.

Eastern Visayas came in next with P108.30 billion or 27.5 percent share, while Ilocos Region placed third with P58.52 billion or 14.8 percent of the total foreign investment pledges.

Total approved investments from foreign and Filipino nationals reached P585.15 billion in the fourth quarter of 2023,  21 percent higher than the P484.53 billion in the same quarter in 2022.

The PSA said these investments are expected to generate 28,529 jobs, down by 25.4 percent from the 38,256 expected employment in the same quarter of 2022.

Of the total expected employment, 23,596 jobs will be created by the foreign investment projects.

For full-year 2023, approved foreign investments reached P889.07 billion, a sharp 268 percent increase from P241.89 billion in 2022.

“For the coming months, possible cuts in the US and local interes rates  later in 2024, if inflation remains well anchored within inflation target of the central bank, could also lead to some pick up in foreign investments,” Ricafort said.

He also said the free trade agreement signed between the Philippines and South Korea last year, as well as the Regional Comprehensive Economic Partnership agreement could further boost trade and investments and overall economic growth.