Commitments of foreign investors to set up shop in the Philippines climbed to a record high P390.1 billion last year, the Philippine Statistics Authority (PSA) reported on Thursday.
The latest PSA data showed that the 2019 haul was not only more than double the P183.3 billion posted in 2018 but it was also likely the highest amount of foreign-led projects so far approved by investment promotion agencies (IPAs).
Prior to this, the highest was registered in 2012, when foreign investment pledges amounted to P289.5 billion.
The PSA report covered approvals made by the following: Authority of the Freeport Area of Bataan (Afab), the Board of Investments (BOI), BOI-Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), Cagayan Economic Zone Authority (Ceza), Clark Development Corp. (CDC), the Philippine Economic Zone Authority (Peza) and the Subic Bay Metropolitan Authority (SBMA).
IPAs extend to investors in priority areas fiscal and nonfiscal incentives, which the Duterte administration wants to rationalize under the proposed second tax package, or the Corporate Income Tax and Incentives Reform Act (Citira).
The Citira, which is now pending in the Senate, is also aimed at gradually reducing the corporate income tax rate from 30 percent at present to 20 percent over a 10-year period.
When these foreign investment commitments materialize, they will be recorded as foreign direct investments.
PSA data showed that foreign investment pledges dropped in four IPAs last year: Afab, P340.2 million (from P1.7 billion in 2018); CDC, P1.3 billion (from P7.1 billion); Ceza, P340.1 million (from P1.2 billion); and Peza, P49.3 billion (from P68.3 billion).
However, these were offset by the big gains posted by three IPAs: BOI, which reported P335.7 billion in commitments in 2019, up from P103.9 billion in 2018; BOI-BARMM, P306.8 million (from P235.1 million); and SBMA, P2.9 billion (from P803.9 million).
The top source of foreign investment pledges last year was Singapore with P176.3 billion, up 732.6 percent from P21.2 billion in 2018.
Last year, Trade Undersecretary Ceferino Rodolfo told the Inquirer that the BOI approved during the third quarter of 2019 Philippine Fiber Optic Cable Network Ltd. Inc.’s upcoming P134-billion investment.
Rodolfo, who is also the BOI’s managing head, had said the Singaporean firm would install 60,000 kilometers of fiber-optic cables nationwide.
China, which was the biggest source of IPA approvals two years ago, slid to second place with P88.7 billion in proposed projects in 2019, which was up by 74.9 percent from P50.7 billion in 2018.
The third largest was South Korea, with P41.5 billion in projects approved last year, or up 2,101 percent from only P1.9 billion two years ago.
When last year’s foreign investment pledges were combined with commitments from Filipino-owned companies, total IPA approvals reached P1.3 trillion, 20.7 percent higher than 2018’s P1.1 trillion.
Filipino-led projects that applied for tax perks in 2019 amounted P918.9 billion, inching up 2 percent from P900.8 billion in 2018.