Project registration with the Board of Investments (BOI) this year is expected to surpass the P655 billion 2021 level, but may fall short of meeting its P1-trillion target set for the year as investments decisions have been derailed by the eruption of the Russian-Ukraine war.
As of Nov. 15 this year, the BOI has approved a total of P644.4 billion or 73.51 percent higher than the P371.4 billion approved during the same period last year.
“What is certain is we will surpass our 2021 performance,” said Board of Investment Managing Head Ceferino S. Rodolfo. But he also acknowledged that with only more than a month left before end 2022, the BOI is unlikely to hit the P1-trilion target because investors did not foresee the Russia-Ukraine war that affected not just the Philippines investment inflow but globally.
“But it is still good news that we’re able to surpass last year,” he said.
Of total amount approved investment pledges to date, 81 percent or P518.3 billion were contributed by domestic businesses while 19 percent or P126.1 billion came from foreign sources.
The power sector got the biggest share of committed investments at P343.8 billion followed by information and communication with P197.6 billion; administrative and support services activities with P26.8 billion; transmission and storage with P25.2 billion; and real estate with P23.8 billion.
Singapore was the biggest country source of BOI-approved foreign investments with P75.3 billion worth of investments. Japan came in second with P29.9 billion, followed by the United Kingdom with P9.9 billion, British Virgin Islands with P2.6 billion, and South Korea with P2.5 billion.
The approved committed investments of P644.4 billion already accounted for 64.4 percent of its internal target of P1 trillion.
Rodolfo, however, said they still have positive investment leads estimated at P529.8 billion for the year. But some of these investments are still expected to start their application processes this year and the actual registration could be completed next year yet as they will not have enough time to process, conduct cost analysis and endorsement for approval by the Fiscal Incentives Review Board.
For 2023, the BOI has already generated estimated investment leads of P372.8 billion. These investments are mainly from the IT-business process management with P125.3 billion, real estate activities with P105.47 billion, and agriculture, forestry, and fisheries with P66.9 billion.
The BOI is also optimistic that more foreign investments are expected to locate in the country with the passage of game-changing economic reforms. These enabling laws include Republic Act No. 11659 or the Amended Public Service Act, RA No. 11647 or the Amended Foreign Investment Act, and RA No. 11595 or the Amended Retail Trade Liberalization Act.
“Big ticket projects we are foreseeing are those in green metals,” Rodolfo said referring to potential investments from the US that the government would be pushing under the US-led Indo-Pacific Economic Framework (IPEF). These projects will benefit from policies like green metals, he said.
The recently approved Energy Department Circular No. 2022-11-0034 amending the Implementing Rules and Regulations of RA 9513 or the Renewable Energy Act of 2008 to allow fully-owned foreign RE projects is also expected to attract more RE investments, primarily for installations in the wind and solar investment space.
The circular signed by Energy Secretary Rafael Lotilla will pave the way for foreign citizens or foreign-owned entities to explore, develop, and utilize the country’s RE resources such as solar, wind, biomass, ocean or tidal energy.
In fact, he said, the investors that they talked to during President Marcos visit to the US include a floating solar project with estimated $1.2 billion investment and other RE for offshore wind projects in the pipeline.
In addition, Rodolfo said, the BOI will be going after investors in East Asia and Japan.