Foreign investment pledges fall to all-time low in Q1

P4 billion FDI commitments lowest since 1996; actual inflows lower at P2 billion

MANILA – The government has approved only P4 billion in foreign direct investment (FDI) pledges for the first 3 months of 2009, the lowest since the National Statistical Coordination Board (NSCB) started compiling data for committed FDIs in the first quarter of 1996.

Data from the NSCB showed that the Board of Investments (BOI), Clark Development Corp. (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA) reported a total of P4 billion in FDI commitments from January to March of 2009, an 80.9% drop from P20.7 billion in the same period last year.

BOI, CDC, PEZA, and SBMA are 4 of the government’s investment promotion agencies.

According to NSCB Technical Staff Raul Clavito, the agency recorded P22.3 billion in FDI pledges in the first quarter of 1996. The second-lowest amount posted from January to March was in 2002 at P5 billion.

“This (P4 billion) is an all-time low,” he told abs-cbnNEWS.com in a phone interview.

Committed investments from foreign businessmen, though already approved by the government, do not guarantee jobs and income for the country as these have yet to be realized. The possibility of investors backing out from the project, or a sudden change in the business environment, should also be taken into account.

Actual inflows

Of the P4 billion in pledges recorded for the first quarter, the Bangko Sentral ng Pilipinas (BSP) reported only half ($44 million or about P2.1 billion) in actual FDI inflows. The figure is a huge 83.5% drop from $266 million recorded in the first quarter of 2008.

“Mas relevant ang BSP data since iyon na ang realized amount. Ito approvals pa lang. (Data from the BSP are more relevant since that includes the realized amount. This figure only shows approvals),” Clavito said.

Asked about the delay in the release of data for FDI commitments, Clavito said the NSCB is having difficulty in compiling figures from various agencies.

Breakdown

The NSCB said the Netherlands topped the list of foreign investors, pledging P848.9 million or 21.4% of total committed FDIs during the 3-month period. Japan and the United States trailed closely with FDI pledges of P809.4 million and P758.4 million, respectively.

More than half (P2.3 billion) of total approved FDIs were said to go to the information and technology services sector, while P1.3 billion are intended for the manufacturing industry.

According to NSCB, bulk of FDI approvals made came from PEZA at P3.4 billion, followed by BOI (P440 million), CDC (P62.6 million), and SBMA (P42.4 million). The agency said a total of 19,596 jobs are expected to be generated from these projects once these are fully realized. –Karen Flores, abs-cbnNEWS.com