Foreign investments slump in Q3

by Louise Maureen Simeon – The Philippine Star, 8 Dec 2021

MANILA, Philippines — The return of restrictive lockdown measures in the third quarter discouraged foreign investments during the period, with overall resources being poured into the country nowhere near recovery.

Latest data from the Philippine Statistics Authority (PSA) showed foreign firms shied away from returning much-needed capital for economic recovery during the third quarter.

Approved foreign investments in the July to September period dropped 45.8 percent to P16.82 billion from the 2020 level of P31.03 billion.

The government reimposed the enhanced community quarantine status in many parts of the country in the third quarter as the Delta variant caused a spike in COVID cases.

Similarly, total investments from both foreign and local investors plunged 43 percent to P100.48 billion. Over 80 percent of this came from Filipinos.

The percentage of foreign investment to the total also slightly declined to 16.7 percent in the third quarter from the 17.6 percent in the same period last year.

For the nine-month period, foreign investments reached P58.87 billion, down 22 percent from the P75.63 billion in the comparative period.

For the third quarter, foreign investment commitments were filed at the Board of Investments (BOI), Clark Development Corp., Philippine Economic Zone Authority, and Subic Bay Metropolitan Authority.

Of the 17 regions in the country, only six received foreign investments.

Calabarzon received the biggest chunk of foreign investments at P8.45 billion during the period. Some P3.4 billion went to the Ilocos Region, while Central Luzon got P2.12 billion.

The others were Metro Manila, Central Visayas and Soccskargen.

Of the investment promotion agencies, 87 percent were made with PEZA at P14.68 billion.

Of the industries, manufacturing secured the highest share at 66 percent with foreign investments worth P11 billion. Real estate activities came in second with P2.7 billion in investments.

Administrative and support service activities ranked third with P2.38 billion in investment pledges.

There was no foreign investment poured into mining and quarrying, water supply, sewerage, and waste management, public administration and defense, education, human health and social work, arts and entertainment, and other service activities.

According to the PSA, the investment commitments were mainly driven by Japanese projects, which accounted for 66.4 percent of the total, followed by Netherlands which comprised 9.2 percent, and companies from the British Virgin Islands which had a 4.2 percent share.

Businesses from Japan committed investments totaling P11.16 billion, while those from Netherlands pledged P1.56 billion. Those from the British Virgin Islands, meanwhile, pledged a total of P1 billion.

The approved investments of foreign and Filipino nationals in the third quarter created 88,324 jobs, up 175 percent from the 32,100 jobs created in 2020.

Of these, 12 percent will be absorbed by projects with foreign interest with the manufacturing sector expected to produce the most number of jobs.