Investment pledges for the Philippines from foreign investors declined 38.8 percent in the second quarter of 2014, compared with the amount of commitments made a year earlier.
Total foreign investments (FI) approved in the second quarter of 2014 by the seven Investment Promotion Agencies (IPA) fell to P36 billion from P58.8 billion approved in the same period last year, data from the Philippine Statistical Authority (PSA) showed on Friday.
These IPAs include the Board of Investments (BOI), Clark Development Corporation (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).
In a technical note, PSA explained that approved foreign investments, which consist of equity investments, loans, and reinvested earnings, do not represent actual investments generated but rather foreign investment commitments that may come in the near future.
Cumulative approved FI for the first six months reached P73.4 billion, down by 32.7 percent from the mid-year amount recorded last year at P109.1 billion.
Of the seven IPAs, CDC, SMBA and PEZA registered significant growth during the quarter, according to the data.
CDC registered the highest increase, with investment pledges growing eight-fold to P7.6 billion from the P749.2 million in the same period in 2013.
Investment pledges in SBMA more than quadrupled to P187.6 million from P39.4 million, while committed investments from PEZA increased by 70.4 percent to P21.1 billion from P12.4 billion in the same period last year.
Despite the increases for the three IPAs, the PSA data noted that pledges from BOI and CEZA went down by 85.2 percent and 49.7 percent, respectively, accounting for the overall decrease.
Meanwhile, manufacturing, real estate activities and food services drew the largest amount of investment pledges during the quarter.
The PSA said manufacturing contributed the largest amount of committed foreign investments in the second quarter of 2014. The investment pledges for the industry were registered at P18.5 billion or 51.4 percent of total FI during the quarter.
Real estate activities came in second with investment pledges valued at P7.2 billion, contributing 19.9 percent, followed by accommodation and food service activities, which accounted for 15.2 percent or P5.5 billion, it said.
The PSA added that the top three prospective investing countries for the second quarter of 2014 include Cayman Islands, Singapore, and British Virgin Islands.
“The Cayman Islands topped the list, pledging P10.0 billion or 27.7 percent share during the quarter,” it said.
Following behind are Singapore and British Virgin Islands, committing P7.8 billion and P5.5 billion, or 21.6 percent and 15.2 percent of the total approved FI, respectively.
The PSA data also showed that the total combined approved investments from both foreign investors and Filipino nationals in the second quarter of 2014 rose 45.8 percent to P257.8 billion from P176.8 billion registered in the comparable quarter in 2013.
Pledges from Filipino nationals stood at P221.8 billion which accounted for 86 percent of the total approved investments during the quarter.
The statistical agency also said that foreign and Filipino ventures approved by the IPAs in the second quarter of 2014 are expected to generate 118,835 jobs, increasing by 186.0 percent from previous year’s projected employment.
Out of these anticipated jobs, 92.6 percent would come from projects with foreign interest, it said.
For the full-year 2013, the total approved FI slid by 5.4 percent, dropping from P289.5 billion in 2012 to P274.0 billion in pledges in 2013.