Pledged investments plunge 72% in half

The total costs of new business projects fell 72 percent in the first half to P79.67 billion from P280.81 billion registered last year.

Trade and Industry Secretary Peter Favila said despite the significant slowdown in the amount of investments, the second quarter has shown a recovery with new project costs reaching P61.7 billion equivalent to a 243 percent growth from P17.98 billion in the first quarter.

Based on April to June performance, Favila said from a slow start, as the country reels from the effects of the global economic slowdown, the country may still meet its investments target of a flat to five percent growth this year.

“As the world economy begins to pull out of a recession as shown by positive signs of generally improving economic and financial conditions in most economies worldwide, although at a snail’s pace, provides impetus for a modest investment performance of the country this year,” he said.

Favila added the approved investments involve 340 projects and are expected to provide direct employment to 55,533 workers.

DTI Undersecretary for Industry and Investments Elmer Hernandez, meanwhile, said most of the second quarter investments were in the sectors that business communities continue to have faith in the country’s absorption of foreign direct investments (FDI).

These sectors include electricity, gas and water supply (P29 billion from P140 million in the first quarter); information technology services (P6.48 billion from P2.45 billion); and manufacturing (P4.3 billion from P1.6 billion).

Local investors continue to be the major source of committed investments during the period with P60.97 billion, 76 percent; while foreign investments account for P18.7 billion or 24 percent.

Among foreign investors, Hong Kong businessmen topped the list for the period with P3.91 billion, followed by the Japanese, Americans and British with P3.32 billion, P3.16 billion, and P2.20 billion, respectively.

The top five investments for the first semester include the two geothermal power projects of AP Renewables Inc. in Makban and Tiwi worth P13.18 billion and P9.54 billion, respectively, the construction of eight IT centers and one incubation building in Baguio for a project cost of P3.94 billion, a mass housing project of DMCI Project Developers worth P3.02 billion and the 17.5-megawatt (MW) biomass power generating plants of Green Power P2.03 billion.

According to Hernandez, investments in the power sector are practically in the renewable and green sector, which bode well for the country as we aggressively address the future growth demands for energy in the near term at the same time, ensure that these are not only renewable but clean as well. –Ayen Infante, Daily Tribune