Despite lingering uncertainties as the Corporate Income Tax and Incentives Reform Act (Citira) seems to have gotten stuck in Congress, investment pledges made by foreign firms jumped by 327.9 percent to P182.4 billion in the third quarter from P42.6 billion a year ago, thanks to a surge in information and communication technology (ICT) projects.These represent the amount of foreign-led projects approved by the country’s seven investment promotion agencies (IPAs) from July to September this year, the Philippine Statistics Authority (PSA) reported on Thursday.
When these foreign investors’ commitments materialize, usually after a couple of years, they will then be reported as foreign direct investments (FDIs).
The IPAs covered in the PSA report were the Authority of the Freeport Area of Bataan (Afab), Board of Investments (BOI), BOI-Autonomous Region in Muslim Mindanao (ARMM), Cagayan Economic Zone Authority (Ceza), Clark Development Corp. (CDC), Philippine Economic Zone Authority (Peza) and Subic Bay Metropolitan Authority (SBMA).The PSA attributed the surge in third-quarter foreign investment commitments mainly to the 1,863-percent increase in ICT pledges to P137.1 billion from only P6.9 billion last year.
In a text message, Trade Undersecretary Ceferino Rodolfo told the Inquirer that the BOI had approved during the third quarter Phil Fiber Optic Cable Network Ltd. Inc.’s P134-billion upcoming investment.
Rodolfo, who is also the BOI’s managing head, said the Singaporean firm would install 60,000 kilometers of fiber-optic cables nationwide.
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.
The bulk of approved foreign investments in the third quarter 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 were expected to 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 from Filipino investors, total end-September IPA approvals rose 87.2 percent to P896.9 billion from P479.1 billion last year.
The prospects of getting the Citira bill passed before the end of this year further dimmed as the Senate took a one-week break amid the Philippines’ hosting of the ongoing 30th Southeast Asian Games. This bill seeks to rationalize the fiscal incentives given to investors while gradually reducing the corporate income tax rate to 20 percent from 30 percent at present.
Some investors had put their plans on hold while awaiting the country’s new fiscal incentives regime. —BEN O. DE VERA