Foreign investment pledges down

Investment commitments made by foreign firms to seven of the country’s investment promotion agencies declined by more than two-fifths year-on-year in the third quarter, the Philippine Statistics Authority reported on Tuesday. FILE PHOTO

MANILA, Philippines–Investment commitments made by foreign firms to seven of the country’s investment promotion agencies (IPAs) declined by more than two-fifths year-on-year in the third quarter, the Philippine Statistics Authority reported on Tuesday.

It said data compiled by the National Statistical Coordination Board (NSCB) showed that foreign investments approved by seven IPAs—Authority of the Freeport Area of Bataan (Afab), Board of Investments (BOI), Board of Investments-Autonomous Region in Muslim Mindanao (BOI-ARMM), Cagayan Economic Zone Authority (Ceza), Clark Development Corp. (CDC), Philippine Economic Zone Authority (Peza) and Subic Bay Metropolitan Authority (SBMA)—amounted to only P18.3 billion during the July-to-September period. IPAs dangle tax and other incentives to attract both local and foreign investors.

The third-quarter approvals were 44.4-percent below the P32.9 billion worth of pledges to the seven IPAs during the same three-month period last year.

The foreign investment commitments made between July and September were likewise lower than the P36 billion recorded in the second quarter and the P37.4 billion pledged in the first quarter.

As of end-September, the seven IPAs approved foreign investments totaling P91.8 billion, down 35.4 percent from the P142.1 billion registered during the first nine months of 2013.

Filipino-led projects continued to outpace approved foreign investments, as the former constituted 88.5 percent, or P141.3 billion, of the P159.6 billion worth of investment commitments with IPAs during the third quarter. The combined local and foreign investment pledges from July to September, however, were lower by 15.7 percent from last year’s P189.3 billion.

In the third quarter, Afab approved P155.6 million in foreign investments (up 43.1 percent year-on-year); BOI, P1.93 billion (down 50.2 percent); BOI-ARMM, P228 million; CDC, P579.9 million (up 263.2 percent); Ceza, P82 million (up 78 percent); Peza, P15.21 billion (down 46.3 percent), and SBMA, P124.5 million (down 67.2 percent).

The top three sources of foreign investments pledges during the third quarter were the Netherlands (P4.4 billion, or 24.3 percent of the total); Japan (P3.7 billion, or 20.1 percent), and the United States (P2.8 billion, or 15.3 percent).

In terms of sectors, investment commitments in manufacturing were the biggest at P8.8 billion, or 48 percent of the total. This was followed by administrative and support service activities (P3.8 billion, or 20.8 percent), and real estate (P2.4 billion, or 13.3 percent).

Almost three-fourths or 74.3 percent of the total 54,606 jobs expected to be generated by all the projects approved by the seven IPAs during the third quarter would be contributed by foreign investments.