EDITORIAL — From commitment to reality

Investment promotion agencies have some good news for the second quarter. As reported by the Philippine Statistics Authority, foreign investment commitments rose by 68 percent, amounting to P115.20 billion, from the P68.48 billion in the second quarter of 2025.

The investment commitments were approved by the Authority of the Freeport of Bataan, Bases Conversion and Development Authority, Board of Investments, Bangsamoro BOI, Clark Development Corp., Clark International Airport Corp., Philippine Economic Zone Authority and Subic Bay Metropolitan Authority.

These are commitments, however, that may or may not push through.

In terms of actual investments, the figures aren’t rosy. Foreign direct investments plunged to an 11-year low in May, falling by 64.7 percent to $210 million from the $595 million in the same month last year, and down 16 percent from the $250 million in April.

The Philippines has become a regional laggard in FDI. While it’s good to hear that investment commitments are up, the challenge is to turn the promises into reality.

Both local and foreign investment organizations have long cited the disincentives to doing business in the country. Among these are red tape beginning at the barangay level, weak regulatory environment and a compromised judiciary, inadequate infrastructure, high power and labor costs as well as expensive logistics.

The scandal that has erupted over corruption in flood control and other public works projects, with top public officials implicated, has further weakened business confidence. Investment groups, multilateral institutions and economists have stressed the importance of the speedy resolution of the corruption issues to improve business confidence.

Despite the passage of at least two laws directly aimed at improving ease of doing business, investors continue to complain about mountains of red tape, mostly designed for the collection of grease money.

The nation must bear in mind that the regional competition for investments is fierce. Neighbors have surpassed the country in many aspects, and have moved aggressively to narrow the Philippines’ traditional edge – an English-speaking skilled workforce.

Government officials with a penchant for overseas trips like to tout investment commitments to justify their junkets. Such commitments, however, can be broken. They become something to crow about only when they are translated into solid investments.