FOREIGN-INVESTMENT approvals saw a substantial increase in the first quarter of 2019, the government reported on Thursday, with four investment-promotion agencies (IPA) recording growth in the period.
According to the Philippine Statistics Authority (PSA), six of the seven monitored IPAs approved P45.983 billion in foreign pledges in January to March, up 223 percent from P14.208 billion in the same period last year.
Four of these that posted year-on-year approval were the Board of Investments (BOI), Clark Development Corp., the Philippine Economic Zone Authority and the Subic Bay Metropolitan Authority.
In contrast, Cagayan Economic Zone Authority’s approvals declined by 23.3 percent, while the BOI-Autonomous Region of Muslim Mindanao approved none in the three months.
Approvals amounting to P174 million made by the Authority of the Freeport Area of Bataan have no comparable 2018 figure.
IHS Markit Asia Pacific chief economist Rajiv Biswas said the latest investment figure “shows that foreign investor confidence in the Philippines is improving strongly.”
According to him, the large upturn in these approvals is a very positive signal for the future economic development of the Philippine economy, particularly because the manufacturing sector received 76 percent of them in the quarter.
The manufacturing industry took the largest share of pledges (P35 billion), followed by administrative and support services (P3.5 billion), and accommodation and food service activities (P2.9 billion), according to the PSA.
“This data shows that foreign investors are becoming more confident about investing in establishing new manufacturing plants in the Philippines for both the domestic [and international markets],” Biswas explained.
This, he said, is a very positive development for long-term industrial development and manufacturing employment creation.
“With multinationals increasingly diversifying their manufacturing supply chains away from China [and] toward Asean (Association of Southeast Asian Nations), this indicates that the Philippines is becoming more competitive as an East Asian manufacturing hub,” Biswas added.
The Netherlands was the top prospective investing country in the first quarter, with P10.1 billion worth of commitments, representing 22 percent of total foreign pledges. Japan and Thailand followed with P9.4 billion (20.5 percent) and P8.5 billion (18.4 percent), respectively.
In terms of location, majority of the approved investments are intended to finance projects in Region 3 (Central Luzon), which accounted for P22.1 billion; Region 4A (Cavite, Laguna, Batangas,
Rizal and Quezon provinces or Calabarzon), P15.7 billion; and the National Capital Region, P6.3 billion.
Approved investments from both Filipinos and foreigners rose by 48.1 percent to P274.2 billion in the three months ending March, compared to P185.1 billion a year ago.
Filipinos continued to dominate the approved investments in the quarter, with a P228.2-billion or 83.2 percent share in pledges.
Projects of foreign and Filipino investors approved by the seven IPAs during the period are expected to generate 41,837 jobs.