Committed projects approved by the Board of Investments (BOI) in 2021 dropped by a significant 35.74 percent compared to 2020, but is confident of hitting P1 trillion in new investments this year as the local and global economies continue to recover from the pandemic.
The BOI reported that it has approved a total of P655.4 billion worth of investment pledges last year as against P1.02 trillion in 2020. The 2021 approved registration was also 27.5 percent lower than the P905 billion target for the year under the General Appropriations Act of 2021. The BOI internal investments target was originally higher at P1.25 trillion, which was later revised to P750 billion.
There were 235 projects that BOI registered last year for incentive purposes. These projects are expected to generate 46,836 jobs at their full commercial operation.
Despite the decline in overall investments, the BOI noted the foreign equity investments, which saw grew substantially to P151.8 billion compared to P47.7 billion in 2020.
In contrast, the amount of registered domestic investments decreased by 48.1 percent to P503.6 billion from P970 billion in 2020.
Some of the big ticket items approved by BOI in 2021 include Makati City Subway project worth P81.1 billion and Calatagan Cement Plant worth P25 billion.
Despite the decline in BOI investment approvals, Trade and Industry Secretary and BOI Chairman Ramon M. Lopez expressed confidence of more upcoming investments into the country.
Lopez cited the With the 98.9 percent increase in foreign direct investments in October 2020 as reported by the Bangko Sentral ng Pilipinas, the BOI remained confident of rosy investment prospects in 2022.
“Buoyed by 2021 FDI results as well as the healthy pipeline of strong investment leads—both foreign and domestic, and with the reforms that we are anticipating to still be passed in the next months, we are confident of hitting Php1 Trillion in BOI approved investments this year,” added Lopez.
Based on the latest BSP data, FDI net inflows remained on their upward trend for the fifth consecutive month in October 2021 to $855 million from the $430 million net inflows in the same period in the preceding year. Particularly, the FDI net inflows for the first 10 months of 2021 increased to $8.1 billion or 48.1 percent growth than the $5.5 billion net inflows in January-October 2020. Further, the cumulative FDI net inflows surged on the back of the 78.6 percent increase in non-residents’ net investments in debt instruments to $5.9 billion from $3.3 billion in the same period in 2020.
Trade and Industry Undersecretary and BOI Managing Head Ceferino S. Rodolfo said a big telecommunication project with investments of P155 billion is seeking registration for incentive purposes before the Fiscal Incentives Review Board (FIRB). The huge telco investment is expected to come from Converge ICT Solutions Inc.
Other projects in the pipeline include a new domestic shipping operator; new operator of charging stations; three new operators of telecommunications infrastructure; a new producer of animal feeds; and a cement manufacturer, Rodolfo added.
He further noted of other upcoming investments such as hyperscalers in telecommunications, e-vehicles, COVID medicines, among others.
There are also strong interest to greener and sustainable projects, renewable energy projects such as hydro and solar plants, which are priority economic activities of the Board of Investments.
Rodolfo noted that these investments have been encouraged with the passage of the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law, which incentivizes investments.
For the country to leap a path to recovery, the BOI also advocated for the passage of the amendments to the following economic measures: the Public Service Act (PSA), which was approved by the Senate on the third and final reading on December 15, 2021; the Retail Trade Liberalization Act (RTLA), which lapsed into law; and the Foreign Investment Act (FIA), which was adopted and ratified by both the Chambers of Congress.