Investment pledges may grow by 13% this year
Total investment pledges approved by the government may make a rebound this year on the back of sustained investor confidence in the local economy.
Huge investment pledges may also spur exports growth. This year, exports may increase 2 percent to 5 percent even with the slowdown in the activities of global economic giants and the impact of the long El Niño spell, the Department of Trade and Industry (DTI) said.
Investments approved by the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) are expected to grow by 13 percent to P719.4 billion this year. Last year, total approved investments dropped by 15 percent to P634 billion.
The DTI even sees this growth being sustained until next year, although at a slower pace of 8 percent to P779.6 billion.
There is a long way to go, however, before the agencies can achieve this year’s targets. First half investment approvals stood only at P170.9 billion, comprising 441 projects that may generate 73,369 jobs once they become fully operational.
Thirty-three percent of the total BOI-PEZA approved investments in the first six months was intended to fund real estate activities. Manufacturing ranked second with a share of 28 percent or P47 billion.
Investment commitments from domestic sources reached P119 billion, or 70 percent, of the total approvals in the first semester, while the remaining 30 percent, or P52 billion, came from foreign sources.
Meanwhile, DTI data showed BOI investment approval is set to grow by 10 percent to P390.2 billion this year from the P354.8 billion registered in 2014. Next year, this figure is seen growing by 7 percent to P417.5 billion.
“The 2015 investment target of BOI is based on the 10 percent per annum target growth rate of the Philippine Development Plan. However, for 2016, approved investments are seen to continue to increase, but at a slower rate of 7 percent, considering that the Investment Priorities Plan is now more focused and keys in on relatively fewer, more strategic sectors,” the DTI said.
PEZA, meanwhile, is expected to post an 18 percent growth to P329.2 billion this year from the P279.5 billion it recorded in 2014. Next year, the growth is seen to be slower at 10 percent to P362.1 billion.
The trade agency said investor confidence remained strong as shown by the growing number of inbound investment missions.
“Industries such as the IT-business process management (i.e., game development and health information management) and aerospace have embarked on the implementation of an aggressive investment promotion program,” the DTI said.
Meanwhile, total exports are expected to hit between $88.7 billion and $91.9 billion this year, an increase from the $86.9 billion recorded last year.
Merchandise exports are estimated to reach $63.1 billion to $65.6 billion this year, up from the $62.1 billion posted last year. Services, meanwhile, are forecast to grow to $26.3 billion this year coming from last year’s receipts of $24.8 billion.
“The targets set for 2015 take cognizance of the anticipated economic slowdown in Japan, US, and China—the top three largest markets for Philippine exports, and the impact of past natural calamities on domestic supply of raw materials,” the DTI said.
The El Niño phenomenon, expected to persist until 2016, is projected to hinder the growth of exports of agro-based products, the DTI said.
