Foreign investment pledges drop 10.7% in 2016

By Czeriza Valencia (The Philippine Star), Feb 25, 2017

MANILA, Philippines – Foreign investment pledges approved by the country’s seven investment promotion agencies (IPA) declined 10.7 percent to P219 billion in 2016 from P245.2 billion in 2015, the Philippine Statistics Authority (PSA) reported yesterday.

In the fourth quarter of 2016 alone, foreign investment pledges tumbled 9.3 percent to P126 billion from P138.6 billion in 2015.

FDI pledges do not represent actual financial inflows, but mere pledges registered with any of the seven IPA. The seven IPA are the Board of Investments (BOI), Clark Development Corp. (CDC), Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM), and Cagayan Economic Zone Authority (CEZA).

According to the PSA, the bulk or 69 percent of the investment pledges made in the fourth quarter of 2016 came from the Netherlands, Australia, and the US.

Approved foreign investments from the Netherlands during the last quarter of last year reached P34.9 billion, accounting for 27.7 percent of the total. Australia committed P31.8 billion or 25.3 percent of the total followed by the US with P 20.1 billion or 16 percent of the total.

According to the PSA, the manufacturing sector accounted for the bulk of FDI pledges with P66.8 billion, followed by the electricity, gas, steam, and air conditioning supply sector with investment commitment valued at P32 billion.

The administrative sector and support service activities industry was the third biggest recipient of FDI pledges with P 11.8 billion.

The Calabarzon (Cavite-Laguna-Batangas-Rizal-Quezon) region cornered the lion’s share or 54.2 percent of the approved foreign investments in the fourth quarter of 2016.

The Cordillera Administrative Region (CAR), was the second biggest recipient with P22.2 billion followed by the National Capital Region (NCR) with P19.2 billion.

Approved investments of foreign and Filipino nationals amounted to P274.8 billion in the fourth quarter of 2016, down 17.3 percent from P 332.3 billion in the same period in 2015.

Total projects of foreign and Filipino investors approved by the seven IPA for the fourth quarter of 2016 are expected to create 49,054 jobs. Out of the total anticipated jobs for the period, 66.7 percent would come from projects with foreign investments.

Foreign investment pledges approved by the investment promotion agencies differ from actual investment inflows reported by the Bangko Sentral ng Pilipinas.