Investment approvals slump 52% to P18 billion

MANILA, Philippines – The global crisis has adversely affected the investing climate in the Philippines as investment approvals for the first quarter of the year decreased by 52 percent, the Department of Trade and Industry (DTI) said.

Trade and Industry Undersecretary Elmer C. Hernandez reported that investments approvals of the two attached agencies of the DTI amounted to only P17.98 billion during the first quarter of this year, 52 percent lower than the P37 billion recorded in the same period the previous year.

The Board of Investments (BOI) reported P4.3 billion worth of investment for the first three months of the year, down 57 percent from last year’s P9.3 billion. The Philippine Economic Zone Authority (PEZA) on the other hand, recorded P13.7 billion worth of investment approvals or 51 percent lower than the P27.7 billion during the same period in 2008.

“Indeed the global economy is bad and it is reflected in our investment data,” Hernandez explained.

This year, domestic investors tried to make up for the slack left by foreigners as more local firms infused money in the country.

Foreign investment approvals went down by 80 percent in the first quarter of 2009 when compared to January to March a year ago. Foreigners only contributed P3.9 billion while it was P19.8 billion last year.

Investments by domestic firms also went down by 21 percent to P14.1 billion from P17.9 billion a year ago.

Employment generated this quarter was also down by 33 percent as only 24,814 new jobs will open as a result of the approvals while it was almost 37,000 in 2009.

The biggest foreign investment came from the Netherlands with P849 million, Japan with P804 million, United States with P715 million, Luxemburg with P447 million and South Korea with P288 million.

Sectors that are expected to attract most investors are energy, mining, processed food, health and wellness, real estate and tourism.

Hernandez noted that mining is expected to bounce back in the second quarter after contracting by 85 percent this quarter. “We are very bullish about mining because the metal prices are starting to recover.”

BOI and PEZA target an increase of five percent in total investments in 2009, or an additional prospective infusion of P458 billion. Of this amount, about P161 billion or approximately $3.22 billion are foreign direct investments.–Ma. Elisa P. Osorio, Philippine Star