Investment pledges coursed through the Philippine Economic Zone Authority (Peza) plummeted to P8.14 billion in the first quarter this year, 68 percent below the P25.38 billion recorded in the same period last year.
Peza blamed the dismal first quarter performance, which was also below the P16.5 billion in pledges it attracted in the first three months of 2020, on the lingering effects of the COVID-19 pandemic as well as uncertainties surrounding the general elections and the impact of Russia’s invasion of Ukraine.
According to Peza Director General Charito Plaza, the significant drop in investment pledges in the first quarter was “anticipated.”
“That’s anticipated because the pandemic is still there. Then we have the [Russian invasion of Ukraine]. Then the election,” she said in a press briefing on Thursday.
“Usually, during election period, investors will wait for what is going to be the results of the elections because they already anticipate that there will surely be new policies and laws and rules that will be adopted by the new administration. You would usually see that during election periods,” she added.
CREATE Act
Data from the Philippine Statistics Authority showed, however, that this was not always true. While this was also the case during the first quarter of 2016, when pledges dropped around 2 percent prior to the presidential elections, the same quarter in 2010 saw pledges more than doubling year-on-year.
The drop in investment pledges in the first quarter also indicated that the promised influx of investments following the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act in March 2021 is yet to materialize.
Trade and Industry Secretary Ramon Lopez had described the reform law as a “game-changer,” in that it would bring in “[a] massive inflow of investments that will create more jobs.”
When the then-bill passed the Senate in November 2020, Finance Secretary Carlos Dominguez III also called it “one of the largest economic stimulus measures in the country’s history.”