Despite the country enjoying investment grade status, foreign investors’ pledges fell by over 41.7 percent in the first quarter to P21.8 billion, Philippine Statistics Authority (PSA) data showed.
In a report, the PSA’s National Statistical Coordination Board (NSCB) said the total value of projects committed by foreign firms to seven investment promotion agencies (IPAs) dropped to P21.8 billion from P37.4 billion worth of foreign-led projects approved by IPAs in the first quarter of last year.
The PSA data covered foreign investment approvals of the following IPAs: Authority of the Freeport Area of Bataan, Board of Investments, BOI-Autonomous Region in Muslim Mindanao, Cagayan Economic Zone Authority, Clark Development Corp., Philippine Economic Zone Authority, and Subic Bay Metropolitan Authority. IPAs offer tax and other incentives to attract investors.
During the first quarter, foreign investors committed P9.1 billion in manufacturing projects, P4.3 billion in accommodation and food service activities, and P2.9 billion in administrative and support service activities.
The top three sources of first quarter foreign investment pledges were Japan (P7.2 billion), South Korea (P5.4 billion) and the United States (P1.7 billion).
The three regions that are poised to host the biggest amount of foreign projects committed between January and March are Region 4-A (P9.1 billion), Region 3 (P6 billion), and the National Capital Region (P5.5 billion).
These foreign-led projects were projected to create 23,932 jobs.
Combined with investment commitments made by Filipino firms, the pledges approved by the seven IPAs during the first quarter totaled P96.5 billion, down 10.1 percent from P107.4 billion a year ago.
Filipino investors contributed P74.7 or more than three-fourths of the IPA-registered projects in the first quarter.
The seven IPAs’ first-quarter investment approvals are expected to create 45,197 jobs.
Last year, investments committed by foreign firms declined by 31.8 percent year-on-year to P186.9 billion.
On its website, NSCB defines foreign investments as those “made to acquire a lasting interest by a resident entity in one economy in an enterprise resident in another economy” where “the purpose of the investor is to have a significant influence, an effective voice in the management of the enterprise.”