THE Board of Investments (BOI) on Tuesday said that investment commitments approved in September this year soared 200 percent to P51 billion from P17 billion a year earlier, reflecting strong investor confidence in the Philippines and indicating that growth is being sustained and accelerated.
For the first nine months, approved investments grew by 50 percent to P286 billion, the BOI said.
“What we are seeing in the real sector that relies on fundamentals of the economy, the fundamental strengths of the economy, is that growth is being sustained or even accelerated,” said Ceferino Rodolfo, trade undersecretary and BOI managing head, during the EU-PH Business Summit 2016.
Rodolfo explained that while there has been an outflow in terms of portfolio investments or hot money, these portfolio investments “are really erratic in nature.”
Portfolio investments are funds that are controlled by investors who actively seek short-term returns. They are called hot money because of the ease by which these investments enter and leave markets.
“In the real sector things are different because businessmen are seeing the continued growth of the Philippine economy,” he said.
In early September, the BOI reported that approved investments for the first seven months of the year reached P210.37 billion, up by a remarkable 98 percent from the P106.08 billion posted in the same period of 2015.
“Investments coming in are in sectors that will elevate our competitiveness, such as in power and infrastructure,” Rodolfo said.
“Dispersion of investments in the region has also changed. NCR [National Capital Region] usually receives the highest amount of investments but now, investments are dispersed as other regions take the lead in attracting more investments,” he added.
The investment pledges were generated from 192 projects with a total estimated job generation of 37,487 expected at full operations, the BOI said.
Rodolfo noted that imports have also increased basically driven by businessmen preparing for the Christmas season.
EU investors seek level playing field
Meanwhile, at the summit, European Chamber of Commerce of the Philippines president Guenter Taus said, “The European business community in the Philippines and in Europe (with ambitions to start operations in the Philippines) have long advocated for change —change that will bring more investment to the Philippines and generate more employment, change that will strengthen EU-Philippine trade ties and create business opportunities for Philippine and European companies alike. Change that will ultimately contribute to inclusive growth, growth that is so needed in this country.”
Change needs to come in support of key sectors with the most potential for growth creation, namely in agri-food, tourism, energy, and infrastructure, just to name a few, he added.
“Change is also needed to create a level playing field for all actors in the economic field. We are encouraged to see that the Duterte administration is inclined to support the amendment of economic provisions in the Constitution that limit the involvement of foreign investors in certain fields, especially in the area of public utilities,” Taus said.
According to Taus, change has become visible in the work done by the newly established Philippine Competition Commission that sees to it that the intent and vision of the Philippine Competition Act is fulfilled.
“Change will hopefully filter in through the EU-Philippines Free Trade Agreement negotiations and their completion, by strengthening trade ties and establishing a level playing field for European companies in the Philippines and Philippine companies in Europe, which have been increasing in recent years,” Taus said.