Double to P186.51B on Duterte economic agenda
Investments in the Philippines doubled in the first half of 2016 to P186.52 billion from P92.02 billion a year earlier, the Board of Investments (BOI) said, attributing the surge to investor enthusiasm over the Duterte administration’s economic agenda.
Most of the growth, it said, came in May and June, indicating investor confidence in the transition in government.
In June alone, investments registered with the BOI jumped 254 percent to P47.17 billion from P13.34 billion in June 2015. Of the P47.17 billion, 94 percent came from domestic investors, generated by 34 projects, the BOI said.
“Sustained impressive investment performance validates the announced economic policy direction of the new administration,” Trade Secretary Ramon Lopez said.
“The challenge is ensuring that these investments benefit the poorest of the poor. The administration will be embarking on measures to make investments more inclusive through, among others, providing linkages with micro, small and medium enterprises (MSMEs), to the agricultural sector, and to the marginalized geographic regions,” Lopez said.
Lopez, who is also the BOI chairman, said the agency expects further growth in registered investments in the coming months given the 30 more projects in the pipeline, worth a total of P63.47 billion.
“These projects, of which more than half have already been check-listed and officially accepted, will be coming mostly from sectors that are of strategic importance due to their impact on inclusive growth and on national competitiveness such as energy and power, manufacturing, agriculture, forestry, and fishing,” he said.
Power and infra investments
The BOI said January to June investments were composed mostly of power and transportation infrastructure projects, among a total of 162 projects that are expected to generate a total of 30,207 jobs when fully operational.
Power generating plants and renewable energy projects cornered bulk of the approved investments in the first semester, accounting for 51 percent of the total. Investment commitments in the sector soared by 402 percent to P95.95 billion from P19.1 billion in the first half of 2015.
These came from 34 power projects, supplying additional capacity of 1,034.12 megawatts (MW) in most parts of Luzon, particularly in Region IV-A where most industries are located. These projects include the Limay Premier Power Corp’s 300-MW Bataan coal fired power plant worth P23.3 billion, and two renewable energy projects, Bayog Wind Power Corp’s 150-MW plant worth P14.73 billion, and Cordillera Hydro Electric Power Corp’s 60-MW plant worth P12.18 billion.
The second highest share of investments were made in the transportation infrastructure sector, taking up 17 percent or P31.9 billion in investment commitments, which is 282 percent higher than the P8.36 billion approved in the same six months last year.
The transport projects include GMR Megawide Cebu Airport Corp’s P16.75-billion Cebu International Airport Project under the public-private partnership (PPP) scheme which involves the operation and maintenance of the Cebu Airport’s Terminal 2; as well as Light Rail Manila Corp’s P15.15-billion Manila Light Rail Transit 1 Integrated Railway System project which involves the operation, maintenance, and modernization of the existing light rail system.
Power and transport investments were followed by investments in low-cost and economic mass housing developments, listing P24.39-billion worth of investment commitments located in the National Capital Region, and Regions III, IV-A, V, VII, IX and XI.
Manufacturing came in fourth in investment pledges, contributing a total of P18.61 billion in the first semester of 2016, which is 9 percent higher compared with P17.14 billion in registered investments in the same period in 2015.
Subsectors of the manufacturing industry, processed foods and automotive segments, logged the highest investments at P8.14 billion and P7.8 billion, respectively.
Investments in processed food manufacturing included San Miguel Corp’s animal feed production in Davao del Sur and Bulacan worth P3.98 billion; Biotech Farms Inc’s milled rice and by-products project worth P1.10 billion; and Roxas Sigma Agriventures Inc.’s various coconut products project in South Cotabato worth P830.50 million.
Automotive and motor vehicle parts manufacturing industry, on the other hand, saw a 95 percent increase in investments to P7.8 billion in the first half of the year due to the initial rollout of the six-year Comprehensive Automotive Resurgence Strategy (CARS) Program early this year.
Under the CARS Program, Mitsubishi Motors Philippines Corp. is set to invest P4.39 billion for the mass production of its volume model Mirage and Mirage G4 in a span of six years, while Toyota Motor Philippines Corp. has also budgeted P3.25 billion for the production Vios model for the same time frame.
Lopez said the CARS Program is expected to secure market opportunities for local MSME parts makers, which can help the sector to attain regionally competitive economies of scale and opportunities to upgrade technology by attracting global joint venture partners.
“Investments coming in are really targeted to help the economy grow. Manufacturing resurgence is now happening, as is evident in the 8.1 percent growth of the sector in the first quarter,” Trade Undersecretary and BOI Managing Head Ceferino Rodolfo said.
“We expect further growth of the sector in the next quarters as the agency leads in continuing the implementation of the Manufacturing Resurgence Program. We have successfully rolled out the CARS Program and unprecedented as it is, we are looking at about three more sectors to develop into a similar program. Manufacturing, by generating large numbers of decent jobs, is key to attaining the administration’s inclusive growth agenda,” he added.
Mostly domestic investment
84 percent of January to June investment approvals by the BOI came from domestic sources, which contributed P156.61 billion to the total.
Foreign investments, on the other hand, only had a 16 percent share or P29.9 billion of the total, 32 percent of which came from Singapore, with P9.63 billion worth of investments, the BOI said.
Following Singapore was the Netherlands with investments amounting to P7.12 billion (24 percent share), Japan with P5.69 billion (19 percent share), British Virgin Islands with P2.02 billion (7 percent share), and Germany with P1.96 billion (7 percent share).
The bulk of investments were placed in the National Capital Region (P37 billion worth), followed by Region III with P34.81 billion, Region IV-A with P28.69 billion, Region VII with P18.43 billion, and Region I with P14.82 billion worth of investments.