Investment pledges made by foreigners and approved by government agencies rose by nearly 160 percent in the second quarter, helping back claims of improving business sentiment in the Philippines.
The National Statistical Coordination Board reported that foreign investments approved by the line agencies amounted to P58.8 billion in the three months to June, 159.6 percent higher than the P22.7 billion recorded in the same period last year.
This brought total approved foreign investment pledges in the first semester to P93.4 billion, more than double the P41.2 billion posted in the same period last year.
The top three sources of investment pledges were the United States, Japan and the Netherlands.
These countries accounted for P43.2 billion, P4.2 billion, and P3.8 billion respectively, of the total.
The foreign investment pledges were approved by the following investment-promotion agencies: Board of Investments, Philippine Economic Zone Authority, Subic Bay Metropolitan Authority, Authority of the Freeport Area of Bataan, and Cagayan Economic Zone Authority.
The increase in investment pledges as of June came amid favorable economic growth.
The Philippines economy grew by 7.6 percent in the first semester from a year ago, one of the fastest growth rates in Asia during the period.
The government’s economic managers said that with improving macroeconomic fundamentals, the Philippines has started catching up with its neighbors in terms of cornering foreign direct investments.
The Philippines remains a laggard in Southeast Asia as far as FDI is concerned.
Officials said, however, that favorable fundamentals should entice more foreign businesses to bring in capital.
Aside from a high economic growth rate, the Philippines likewise enjoys benign inflation, highly liquid and stable banking sector and a young labor force, they said.
Not all of these investment pledges, however, are expected to become reality.
But Trade and Industry Secretary Gregory Domingo said in an economic forum on Tuesday that the government was confident that FDI will substantially grow in the coming years.
He said the Philippines was poised to register a 15- to 20-percent year-on-year increase in FDI, which should create more jobs.
Economic managers have cited ongoing efforts, such as by the Securities and Exchange Commission and the Bureau of Internal Revenue, to streamline and automate processes in business registration in order to shorten those.
They likewise cited the investment ratings that the Philippines received earlier this year from Fitch Ratings and Standard & Poor’s.
They said the investment grades were a testament to the government’s improving fiscal situation and ability to invest in infrastructure and other development initiatives.