Foreign investment pledges fell 71% in 2020

MANILA, Philippines — Amid the prolonged Covid-19 pandemic which caused business uncertainty and a recession, foreign investors’ commitments to set up shop in the Philippines fell 71 percent to P112.1 billion in 2020.

The foreign pledges approved by seven investment promotion agencies (IPAs) last year dropped from the record-high P390.1 billion, based on the Philippine Statistics Authority (PSA) data released Wednesday.

PSA data showed the total foreign investment approvals in 2020 was the lowest in three years, or since the P105.7 billion in 2017.

The seven IPAs covered by the PSA report—Authority of the Freeport Area of Bataan (Afab), Board of Investments, BOI-Bangsamoro Autonomous Region in Muslim Mindanao (BARMM), Cagayan Economic Zone Authority (Ceza), Clark Development Corp. (CDC), Philippine Economic Zone Authority (Peza), and Subic Bay Metropolitan Authority (SBMA)—give away tax and other perks to incoming investors and locators.

During the fourth quarter alone, foreign businesses pledged P36.5-billion worth of projects to IPAs, a 67.5-percent drop from P112.1 billion during the fourth quarter of 2019.

In a statement, PSA said foreign investment commitments from the United States cornered 36.7 percent of the fourth-quarter haul, amounting to P13.4 billion.

Forthcoming Taiwanese investments reached P4.4 billion, while those from Japan were worth P4.3 billion, the PSA said.

The foreign projects green-lit by IPAs from October to December last year will create 24,239 jobs, it added.

When the foreign pledges were combined with IPA-approved projects of Filipino investors, approvals during the fourth quarter of last year totaled P270.1 billion, down 34.5 percent from P412.2 billion a year ago.

For the entire 2020, the seven IPAs approved P1.14 trillion in new investments, down 13 percent from P1.31 trillion in 2019.