Following record-high investment approvals last year, the Board of Investments (BOI) shared that it hopes to achieve around P1.3 to P1.5-trillion investment approvals in 2024.
In a press briefing on Friday, Jan. 5, Department of Trade and Industry (DTI) Secretary Alfredo E. Pascual, who is also BOI chairman, said that P1.1 trillion is the official commitment or target of the agency in terms of investment registration this year.
The aggressive target follows the 10 percent annual increase measurement it uses in determining goals, based on the P995.59 billion target it officially submitted to the National Expenditure Plan (NEP) for 2023.
However, Pascual said that their internal target or goal "is to exceed what we have achieved this year."
BOI Managing Head Ceferino Rodolfo said the internal target is to be within the range of P1.3 to P1.5 trillion.
In early 2023, the BOI told the media that they aimed to reach a P1.5 trillion investment approvals target for the whole year.
Rodolfo clarified that the P1.5 trillion value was more of an "aspirational goal," since the foreign and domestic investment approvals target it officially filed to the NEP was only P995.59 billion for 2023.
Meanwhile, the set goal for the overall Investment Promotion Agencies (IPA)-approved investments was P1.151 trillion in 2023.
Investment Promotion Services Executive Director Eries Cagatan said they "missed to approve P272 billion which could have brought approvals to P1.532 trillion."
Rodolfo disclosed that there were two projects that were discussed but withheld official action due to pending compliance with requirements. These were the P72 billion-worth Combined Cycle Gas Turbine Power Plant, and the Solar Energy Power Project by SP New Energy Corporation (SPNEC) valued at P200 billion.
Pascual said that these pending projects, if approved this year, may help the agency exceed its official and even internal targets.
More foreign investments seen
According to BOI's latest data, its total approved investments for the entire of 2023 amounted to P1.26 trillion, marking a 73 percent surge from P729 billion in 2022.
Pascual noted the bigger proportion of foreign investments approvals at P766.97 billion compared to P493.23 billion in local investment approvals.
Historically, local investments were higher than foreign investments at an 80 to 20 average ratio.
"It's indicative of how the Philippines is becoming attractive to foreign investors," he remarked.
Majority of the investments were from Germany with P393.28 billion, followed by the Netherlands P333.61 billion, Singapore with P21.45 billion, then the United States with P3.55 billion.
Meanwhile, majority of the investment approvals are in the renewable energy (RE) sector with P987.12 billion.
Rodolfo noted that they expect more RE investments to come in, specifically from Europe. He added that many RE projects still have pending registrations to the BOI and the Green Lane program.
IAS and One Stop Action Center for Strategic Investments Director Ernie Delos Reyes said the total cost of Green Lane projects for possible registration with BOI this year may amount to around P930 billion.
These include certified Green Lane projects worth P370 billion, projects valued at P360 billion under evaluation, and incoming applications worth P200 billion, referring to the SPNEC.
The information and communications sector also saw big investment numbers with P96.04 billion, along with mining with P79.19 billion, manufacturing with P22.05 billion, and infrastructure with P21.47 billion.
Philippine FDI growth vis-a-vis ASEAN
In a previous TV interview, Rodolfo remarked that, "if you look at the figures now, in the first quarters of the year, the Philippines is doing better than Thailand and Malaysia."
Rodolfo explained to reporters that while the Philippines did record a lower FDI growth rate last year, the country fared higher in comparison to other Southeast Asian Nations that have also seen similar FDI declines.
Based on data from the BOI from January to September 2023, the Philippines recorded a 15.9 percent decrease in FDI year-to-date, logging a total of P5.87 billion FDIs.
Malaysia saw the biggest plunge in growth rate by 61.31 percent, garnering 4.99 billion FDIs. It is followed by Thailand with its growth rate dropping by 50.75, logging 4.43 billion FDIs.
Meanwhile, Indonesia logged a negative 18.7 percent growth rate in the same period, but it's FDIs remain high at 16.32 billion.
Only Vietnam was able to record a stable FDI growth rate in the first three quarters of 2023 with 2.25 percent, and a total value of 15.91 billion in FDIs.
However, Vietnam was one of the last to recover back in 2021 with negative 1.20 percent compared to its neighbors like the Philippines which registered a 75.6 growth rate, Malaysia with 279.7 percent, Indonesia with 13.66 percent, Thailand with 406.39 percent, and Singapore with 75.17 percent.
"In this context, this is what we're saying that we're really hopeful that at the end of the President term, we would be the second biggest destination of FDIs in Southeast Asia based on the pipelines that we are developing," clarified Rodolfo.
Among the projects in the pipeline that he noted were renewable energy (RE) and manufacturing and supply of RE equipment, mineral processing, providing solutions for light manufacturing companies concerning their Net Carbon Zero commitments.