Total foreign direct investments (FDI) approved in the first quarter of the year by the four major investment promotion agencies (IPAs) amounted to P22 billion, or 52.8-percent lower than the amount approved in the same period of 2010, according to the National Statistical Coordination Board (NSCB).
Except for the Board of Investments, the other IPAs, namely Clark Development Corp. (CDC), Philippine Economic Zone Authority and Subic Bay Metropolitan Authority (SBMA) suffered setbacks in FDI applications. SBMA and CDC registered the highest declines of 93.7 and 92 percent, respectively.
The United States led all other countries with investment pledges of P6.7 billion, accounting for 30.6 percent of total approved FDI during the quarter.
This was followed by Japan and Korea with P4.7 billion or 21.5 percent, and P3.8 billion or 17.5 percent, respectively.
Despite the decrease in FDI, the combined approved investments of foreign and Filipino nationals reached P161.9 billion in the first quarter of 2011, up 76.5 percent from last year’s P91.8 billion.
Filipino nationals more than made up for the decrease in FDIs by committing P139.9 billion in investments for the first quarter of 2011, more than three times the P45.1 billion committed a year ago.
NSCB secretary general Romulo A. Virola said in a phone interview that speculative price increases in commodities, particularly oil, due to crises in several parts of the world might have made investors “uncertain” about overseas expansion. He noted a recent survey by the Banko Sentral ng Pilipinas showed waning investor confidence in the second quarter of 2011.
“Investors may have started feeling the uncertainties as early as the first quarter. The biggest drops were from Japan and Korea, although the FDIs from the US doubled. Filipino investors seemed to have more confidence in general than their foreign counterparts, partly because of their belief in the present administration, but the latest central bank survey also shows some easing in the confidence level,” Virola said.
Raymundo J. Talento, director of the NSCB’s economic statistics office, said that FDI levels also came from a high base in 2010. “FDI levels often fluctuate, anyway, unlike commodities which can sustain price hikes due to continuous demand,” Talento said.
Manufacturing remained the top FDI recipient as it stood to receive 76.1 percent of the total approved commitments.
However, the amount of P16.8 billion intended to fund manufacturing projects was 60.9-percent lower than last year’s P42.9 billion.
Trailing far behind were administrative and support service activities at P1.8 billion or 8.2 percent, and real estate activities at P1.5 billion or 6.7 percent worth of investment commitments.
Foreign and Filipino ventures approved by the four major IPAs in the first three months of 2011 were expected to create 41,205 jobs, or 1.5-percent higher than last year’s projected employment of 40,612.
Out of the total expected jobs, 79.1 percent or 32,582 jobs would come from investments with foreign interest while the remaining 20.9 percent or 8,623 are from Filipino investors.