Investment commitments down 14.5% in 2014

MANILA, Philippines–Total investment commitments approved by the Philippine Economic Zone Authority and the Board of Investments fell by 14.5 percent to P634.24 billion in 2014, dragged mainly by the 24- percent decline in the value of projects approved by the BOI.

Of the amount, P279.48 billion represented the investment projects approved by Peza. This was 1.2 percent higher than the P276.13 billion worth of projects approved in 2013.

Investment projects approved and registered by the BOI reached P354.76 billion last year.

Trade Secretary Gregory L. Domingo was, however, quick to note that despite a decline in investment registration in terms of value, the number of jobs generated by the proposed projects continued to rise significantly over the past four years.

“If you look at the (value of investment approvals) in 2014, it was basically the same as 2011 and 2012, because we had a blip in 2013. But if you look at employment numbers, these were quite good in 2014,  near the record high seen in 2011 and significantly higher than the 2012 and 2013 levels. In fact, over the last four years, 2014 recorded the highest in terms of employment,” Domingo pointed out.

The projects approved by the BOI and Peza are expected to generate a total of 181,286 jobs once completed, up 22.5 percent compared to the 148,014 personnel that will be employed by the projects approved in 2013.

“While the investment amounts are lower, these figures are showing that the quality of the investments in terms of direct employment generated is actually better—definitely higher value added,” Domingo added.

For 2015, the Philippines is expected to attract more investments, particularly in areas where it can have a competitive advantage compared to its peers in the region.

The Department of Trade and Industry, Domingo said, would continue to promote the country’s strengths in the manufacturing sector and the IT-business process outsourcing space.

Another factor that could further attract more investors to locate in the Philippines was the country’s recent inclusion in the the new generalized system of preferences (GSP+) of the European Union, Domingo added.

Effective for 10 years starting Dec. 25, 2014,  the GSP+ status given to the Philippines would enable local firms to export to Europe more than 6,200 product lines at zero duty.

Some of the Philippines’ most important exports to Europe are processed fruit and foodstuffs; coconut oil; footwear; fish and textiles.

The GSP+ status would significantly boost investments, jobs and  Philippine exports to Europe by as much as 611 million euros or roughly P38 billion. It would also strengthen the country’s pitch as an attractive production hub in the Asean.

Government documents earlier showed that the BOI and Peza were targeting total investment approvals to reach a P869.3 billion in 2015 and P956.3 billion in 2016.

The BOI alone is looking at investment approvals of P540 billion in 2015 and P594 billion in 2016.

For Peza, the investment targets are P329 billion in 2015 and P362 billion in 2016.

So far, both agencies have not made any statement about revising these targets.