Foreign investment pledges up 27% in the second quarter
MANILA -Foreign investments approved by various investment promotion agencies during the second quarter of 2023 surged by 27.8 percent to P59.1 billion from P46.3 billion in the same period last year, according to the Philippine Statistics Authority (PSA).
The PSA reports on investments pledges—plans that may or may not be ultimately realized —as opposed to capital inflows that have actually come in and made an impact on the economy.
The second-quarter data covers those pledges made to and approved by the Board of Investments (BOI), BOI-Bangsamoro Autonomous Region in Muslim Mindanao, Clark Development Corp., Clark International Airport Corp., Philippine Economic Zone Authority and Subic Bay Metropolitan Authority.
Prospective inflows from investors that are based in Japan accounted for the biggest value of investment committed, at P20.36 billion or one-third of the quarter’s total. This was followed by Singapore (P17.65 billion or 30 percent) and Cayman Islands (P11.63 billion or 20 percent).
In terms of business activity, the manufacturing sector represented the largest amount of approved investment at P35.1 billion or 59 percent of the total.
This was followed by information and communication (P13.92 billion or 24 percent), and administrative and support service activities (P3.33 billion or 6 percent share).
In terms of regions, Soccsksargen accounted for pledged investment amounting to P19.39 billion or one-third of the total for the second quarter.
This was followed by Calabarzon (P14.64 billion or 25 percent) and the National Capital Region (P3.12 billion or 5 percent).
In a related development, the net inflows of foreign direct investments (FDI) into the Philippines fell for the third month in a row in May at 34 percent to $488 million from $739 million in the same month of 2022.
“The decline in FDI net inflows reflected the 70.7 percent contraction in nonresidents’ net investments in debt instruments to $161 million from $551 million in the same month last year,” the BSP said.
The BSP keeps FDI data that represent capital which actually moved, instead of pledged or planned investments that may or may not be realized.
“FDI remains subdued due to the effects of relatively higher price and interest rate levels globally,” the central bank added.
The latest monthly results put the readout for the January-May period at net inflows dropped by 21 percent to $3.4 billion from $4.3 billion in the same period last year. INQ