Q4 investment pledges drop 27.9%, down 31.8% for 2014

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Investment pledges for the Philippines from foreign investors fell 27.9 percent in the fourth quarter of 2014 compared with a year earlier, with six of seven Investment Promotion Agencies (IPAs) recording lower approved foreign investment during the quarter.

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Total foreign investments (FI) approved in the fourth quarter of 2014 by the seven IPAs dropped to P95.19 billion from P131.96 billion approved in the same period last year, data from the Philippine Statistical Authority (PSA) showed on Monday.

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
Of the seven IPAs, only SBMA posted a year-on-year growth of 464.4 percent to P646.8 million from P114.6 million in the same quarter a year earlier.

BOI-ARMM recorded zero growth in approved FI in the fourth quarter, while IPAs posting negative growth were AFAB (-91.3 percent), BOI (-56.5 percent), CDC (-56.2 percent), CEZA (-52.4 percent), and PEZA (-5.2 percent).

Manufacturing, administrative and support services, and construction activities drew the largest amount of investment pledges during the quarter.

“More than half or 57.2 percent of the total FI commitments in the fourth quarter of 2014 were intended to fund projects in the manufacturing industry,” the PSA stated.

The foreign investments for the sector, valued at P54.4 billion, were 5.3 percent higher than the P51.7 billion committed in the fourth quarter 2013.

The second highest recipient of approved FI were administrative and support services, which accounted for 19.8 percent or P18.8 billion, followed by construction with commitments of P7.6 billion, or an 8.0 percent share of the total.

The PSA added that the top three prospective investing countries for the fourth quarter of 2014 included the Netherlands, Japan and the United States.

The Netherlands committed P23.0 billion or 24.1 percent of the total approved FI in the fourth quarter of 2014. The amount is 58.9 percent higher than the P14.4 billion it pledged in the same period of the previous year.

The PSA data also showed that the total combined approved investments from both foreign investors and Filipino nationals in the fourth quarter of 2014 fell 1.9 percent to P231.2 billion from P235.7 billion registered in the comparable quarter in 2013.

Pledges from Filipino nationals stood at P136 billion during the quarter.

Despite the drop in investment value, the statistical agency also said that foreign and Filipino ventures approved by the IPAs in the fourth quarter of 2014 are expected to generate 61,424 jobs, increasing by 30.7 percent from previous year’s projected employment.

Out of these anticipated jobs, 71 percent would come from projects with foreign interest, it said.

Pledges down 31.8% in 2014
For the full year 2014, total approved FI reached P186.9 billion, down by 31.8 percent from P274.0 billion pledges recorded in the previous year.

Japan contributed the largest share of approved investments for the year 2014, accounting for 19.1 percent of the total FI or P35.7 billion in pledges. It was followed by the Netherlands and the United States
The bulk of FI commitments in 2014 were intended for projects in the manufacturing industry, valued at P109.5 billion or 58.6 percent of the total investment pledges.

Investment commitments from both foreign and Filipino nationals during the year amounted to P755.9 billion, inching up by 0.2 percent from P754.0 billion in the previous year.

75.3 percent of investments approved during the year came from Filipino investors, amounting to P569.0 billion, an increase of 18.5 percent.

For 2014, projected employment from approved foreign and Filipino investments totaled 283,354 jobs, an increase of 74.9 percent from 161,998 jobs recorded in the previous year.

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