By Bernie Cahiles-Magkilat
Investment pledges registered with the Board of Investments (BOI) grew 105 percent in January-Sept. this year to ₱764.7 billion from ₱372.9 billion driven by power and IT projects with a strong flow of foreign capital.
BOI Managing Head Ceferino Rodolfo reported that for the month of September alone, BOI was able to register ₱155.7 billion worth of projects or 50.3 percent higher than the ₱103.6 billion in September 2018.
For the first nine months of the year, Rodolfo said that approved investment commitments from Filipino businesses reached ₱524.9 billion, a 54.7 percent increase from ₱339.3 billion in the same period in 2018.
Notably, he said, projects by foreign investors amounted to ₱239.9 billion which surged seven times or 613 percent higher than ₱33.6 billion a year ago.
Among foreign investors, Singapore continued to set the pace among all foreign entities with ₱170 billion in equity contribution. South Korea ranked second biggest with ₱34.1 billion. Netherlands placed third with P9.2 billion. Thailand contributed ₱8.6 billion, Japan at fifth place with ₱6 billion. US came a poor 7th at ₱2.4 billion.
In terms of destinations, investments have become more dispersed with the 98.2 percent of projects worth ₱750.9 billion locating outside the National Capital Region. Among the regions, CALABARZON (Region IVA) got the highest share with ₱354 billion worth of investments followed by Region III (Central Luzon) with is runner-up with ₱42.4 billion. NCR was still a favorite at third place with investments of ₱13.8 billion. Other projects went to Region VII (Central Visayas) with ₱10.1 billion and Region II (Cagayan Valley) with ₱10.05 billion.
Rodolfo said that all projects once these projects become operational, they are expected to generate 41,862 employment or 38.5 percent higher than last year’s figure of 30,218.
In terms of sectors, Rodolfo said that investments from the information and communications technology (ICT) and power sectors accounted for 85 percent of the total figure or ₱652.9 billion. This massive infrastructure buildup for more power and connectivity across the archipelago is critical towards addressing binding constraints to the Philippines’ competitiveness.
This development also complements the consistent growth of the manufacturing sector with P63.5 billion in approvals or a massive 190 percent growth from just P21.9 billion last year, said Rodolfo.
The tourism sector continued to attract new investments with P9.5 billion worth of hotel projects registered with the BOI or nearly seven times more than the P1.2 billion worth of investments poured in the same period last year.
“We look forward to the coming years for a tourism boom with the recent announcement of a well-known brand (Marriot) to triple its portfolio by building 21 more hotels and the aggressive expansion of more affordable hotels (like RedDoorz) in the country,” said Rodolfo.
The biggest project registered in September was Orion Pacific Prime Energy Inc.’s 1200-megawatt (MW) coal-fired power plant in Quezon province with investments of P130.3 billion. Other notables include Petron Corporation’s P10.9 billion solid fuel-fired power plant in Bataan, 6 Barracuda Energy Corp.’s P7.6 billion wind power project in Northern Samar, Cebu Air’s P1.7 billion operational lease of Airbus A320 NEO plane, Cavite Gateway Terminal Inc.’s P1.35 billion seaport terminal and Starlite Gallant Ferries, Inc’s Php1.1 billion domestic shipping project with home wharf at Batangas City and to service the Cebu-Cagayan de Oro-Cebu routes.
“We are particularly pleased to highlight that the share of foreign investments in BOI projects
have increased from just 8 percent during January to September 2018, to already 31.4
percent this year,” said DTI Secretary Ramon M. Lopez, who is also chairman of BOI.
Lopez said that the sustained high growth of investments is a proof of the business sector’s strong confidence in both the Philippines’ economic fundamentals as further shown by the acceleration of the third quarter Gross Domestic Product growth to 6.2 percent.
“This is expected to continue as President Duterte’s policy of furthering relations with non-traditional partners has been yielding results. For example, the recent visit of a Russian Trade delegation in the country and President Duterte’s second official visit to Russia will pave the way for more business opportunities and closer economic cooperation for both countries,” Lopez said.
The Philippines under the Duterte administration is also building strong economic relations with China. Ironically though, both China and Russia did not make their presence felt among the country’s largest sources of foreign investments.