Despite lingering uncertainties as the Corporate Income Tax and Incentives Reform Act (Citira) dragged in Congress, investment pledges made by foreign firms jumped by 327.9 percent to P182.4 billion in the third quarter thanks to a surge in information and communication technology (ICT) projects.
The amount of foreign-led projects approved by seven investment promotion agencies (IPAs) from July to September climbed from P42.6 billion during the same three-month period in 2018, the Philippine Statistics Authority (PSA) reported on Thursday, Dec. 5.
When these foreign investors’ commitments materialize, usually after a couple of years, then they are reported as foreign direct investments (FDIs).
The seven IPAs included in the PSA report were the Authority of the Freeport Area of Bataan (Afab), the Board of Investments (BOI), the BOI-Autonomous Region in Muslim Mindanao (ARMM), the Cagayan Economic Zone Authority (Ceza), the Clark Development Corp. (CDC), the Philippine Economic Zone Authority (Peza), and the Subic Bay Metropolitan Authority (SBMA).
The PSA mainly attributed the surge in third-quarter foreign investment commitments to the 1,863-percent increase in ICT pledges to P137.1 billion from only P6.9 billion in 2018.
PSA data showed that during the third quarter, the BOI approved P134.5 billion in ICT investments; CDC, P108.6 million; Ceza, P72.3 million; and Peza, P2.4 billion.
During the third quarter, the bulk of approved foreign investments came from Singapore (P135 billion or 74 percent of total); South Korea (P34.3 billion); and Japan (P3.9 billion).
These third-quarter foreign-investment approvals will generate 27,487 jobs.
From January to September, IPA-approved foreign investment pledges grew 216.6 percent to P277.9 billion from P87.8 billion a year ago.
Combined with commitments coming from Filipino investors, total end-September IPA approvals rose 87.2 percent to P896.9 billion from P479.1 billion last year.
Prospects of the Citira bill passing by yearend grew dimmer after the Senate took a week-long break that had not been explained fully except that it was timed for the country’s hosting of the SEA Games.
Citira seeks to redraw fiscal incentives for foreign investors and reduce corporate income tax from 30 to 20 percent.
As the passage of Citira hung, some investors remained on wait-and-see attitude on the country’s new fiscal incentives regime.