Year-to-date investments approved by the Philippine Economic Zone Authority (PEZA) continue to trend upward compared to the previous year, but uncertainties stemming from the United States' (US) tariff policy are dampening foreign investor interest.

In a statement, PEZA said it has approved ₱66.34 billion in investment pledges from January to May, 80-percent higher than the ₱36.83 billion recorded in the same period last year.

The pledges, which translate to actual investments over time, cover 102 new and expansion projects. These are projected to create approximately 29,000 jobs and generate over $1 billion in export revenues.

PEZA said its strong performance this year is a testament to the growing investor confidence in the country’s economic zones.

From January to February, the investment promotion agency (IPA) approved ₱52.93 billion worth of investment pledges, jumping 338 percent from ₱12.1 billion during the first two months of 2024.

In March, when talks of new tariffs intensified under the Trump administration in the US, approvals eased to ₱6.01 billion—which was still better than the ₱2.86 billion in the same month last year.

For April, however, the IPA only approved ₱4.58 billion in investment pledges, a sharp 69-percent drop from the ₱15 billion last year.

During the month, US President Donald Trump announced a sweeping baseline 10-percent tariff on all foreign-based goods coming into America.

Trump also imposed higher reciprocal tariffs on the majority of its trading partners, with the Philippines facing a 17-percent tax. This was then postponed until July.

PEZA did not specify the exact number of approvals in May, but based on the accumulated investments since January, it recorded approximately ₱2.82 billion. This would be a 59-percent decline from the ₱6.87 billion in the same month in 2024.

“There still remains some uncertainty regarding the US tariffs which are currently being negotiated,” said PEZA Director General Tereso Panga.

To improve investor confidence amid shifting global policies, Panga said the IPA is looking to capture the growing interest of Chinese companies in the Philippines under the China plus one (C+1) scheme.

“PEZA has received numerous amounts of inquiries lately and we are confident that we can do a quick turn-over and welcome these companies as new locators” he said.

The C+1 strategy emerged during the trade dispute between China and the US during the first Trump administration, where companies diversified their supply chain and manufacturing activities away from China and into new markets to mitigate risks.

With both countries engaging in another heated dispute, PEZA sees potential benefits for the country to garner more investments.

According to PEZA, South Korea is the leading source of investment commitments so far this year, accounting for 16.12 percent of the total approved investments. The recently implemented South Korea-Philippines free trade agreement (FTA) was cited as the major contributor to the strong contribution.

Other major sources of investment include the US, China, Japan, and the Netherlands.

Panga said the agency is in talks with Malaysian and Indonesian companies that have earlier signaled their interest in establishing their foothold in the country.

“We welcome these interests as we continue to grow and strengthen inter trade ties among our neighbors, making the ASEAN [Association of Southeast Asia Nations] region a more cohesive economic and trade area,” he said.

On the industry front, the manufacturing sector topped the list of investment pledges by the end of May with 41 investment commitments, followed by the information technology and business process management (IT-BPM) sector with 32 pledges.

Calabarzon region—comprising the provinces of Cavite, Laguna, Batangas, Rizal, and Quezon—remains as the top investment destination thus far this year, notching 50 investments.

Despite the sluggish growth in investment approvals due to the tariff threat, PEZA remains on track to reach its growth target for this year.

The IPA earlier set its target to boost investment approvals by nine to 10 percent in 2025.

It approved ₱214.18 billion worth of investments in 2024, a 22-percent increase from the previous year’s ₱175.7 billion.