Investment Destination Shifts as Pledges Surge

“Dispersion of investments change as amount of pledges increase.” 

The Board of Investments (BOI) approved P210.37 billion worth of investment pledges in the first seven months of the year, nearly double, or 98% higher from the P106.08 billion registered in the same period in 2015, riding on the surge of proposals for power and transportation infrastructure projects.

From January to July, pledges have also seen a change in the concentration of approved investments, with Central Luzon taking the lead share at 21% valued at P44.32 billion. The National Capital Region (NCR) followed with committed investments worth P37.05 billion, accounting for 18% of the total share.

Trade Undersecretary and BoI Managing Head Ceferino S. Rodolfo said in a statement yesterday that the investments to come in would improve the country’s competitiveness, citing the proposals in power and infrasturcture sectors.

“Dispersion of investments in the region had also changed. NCR usually receives the highest amount of investments, but now, investments are dispersed as other regions take the lead in attracting more investments,” he said.

Significant investments were also directed to Calabarzon, Central Visayas, Soccsksargen, Ilocos Region, Negros Island Region, and the Cordillera Administrative Region.

BoI attributed the surge to the approval of big ticket projects throughout the course of the first seven months such as the Limay Premier Power Corp.’s P23.30-billion 300-megawatt fluidized bed coal fired power plant in Bataan, GMR Megawide Cebu Airport Corp.’s P16.75-billion Cebu International Airport Project, a public-Private Partnership (PPP) project which will involve the operation and maintenance of the Cebu Airport’s Terminal 2; and the Light Rail Manila Corporation’s P15.15 billion Manila Light Rail Transit 1 Integrated Railway System Project which will involve the operation, maintenance, and modernization of the existing light rail system.

It also cited two renewable energy projects that backed the big boost — the Bayog Wind Power Corp.’s P14.73-billion power plant with a generating capacity of 150 megawatts, and the Cordillera Hydro Electric Power Corp.’s P12.18-billion power plant with a generating capacity of 60 megawatts.

For the month of July alone, among the top approved projects are El Elyon Power Plan Phils., Inc. at P11.64 million, with a generating capacity of 160MW in Sarangani Province; and Luzon Clean Water Development Corp. at P8.38 million, a PPP project for the Bulacan Bulk Water Supply Project — the first two stages of which are under concession agreement with the Metropolitan Waterworks and Sewerage System (MWSS).

Compared with the same period last year, energy projects leaped more than thrice this year or 325% to a total of P108.06 billion from P25.43 billion, accounting for over half of total approvals.

This is followed by investments in the construction sector which increased nearly fourfold, or 281.58% to P31.9 billion from P8.36 billion, real estate which climbed 4.57% to P26.76 billion from P25.59 billion, manufacturing that inched 2.75% higher to P18.66 billion from P18.16 billion, and transportation and storage which increased 9.99% to P13.32 billion from P12.11 billion.

At full operation, BoI said that the total investment pledges, which came from 192 projects, could generate as much as 37,487 jobs.

Singapore topped the list among the foreign country investors in the first seven months with investments worth P9.83 billion or 27% share to total approved foreign investments during the period. Netherlands followed behind with investments amounting to P7.12 Billion, while South Korea came in third with P6.42 billion, Japan with P5.69 billion and British Virgin Islands with P2.02 billion.

Trade Secretary and BoI Chairman Ramon M. Lopez said that they expect the approved investment pledges to continue growing on the back of sound economic fundamentals and sustained investor confidence.

“While confidence in the economy remains with investments continuing to pour in, the government is pursuing a number of strategic investment policy and promotion initiatives in a bid to further strengthen its efforts in attracting a massive flow of domestic and foreign investments in the country particularly those that would bring in new technology,” he said in a statement.

Mr. Lopez cited a planned synchronization of efforts of all investment promotion agencies (IPAs) and the modernization of current investment perks through proposing amendments to the 1987 Omnibus Investment Code which would further boost the Philippine branding as a destination for foreign investments.

“In granting incentives, we will focus on creating decent jobs in the Philippines. As such, bias against foreign investors and bias against those serving the domestic market will be removed. Further, if the economic provisions of the Constitution will be amended, greater foreign equity in sectors that are crucial to improving the competitiveness of industries such as infrastructure and utilities like telecommunications, roads, ports, and airports, may be allowed,” he said in the statement.

He also said that the agency is considering to link the Philippine Economic Zone Authority and other ecozone locators with the domestic MSMEs as suppliers of raw materials, intermediate parts and components.

Investment pledges commitments do not yet represent actual financial inflows, but mere pledges registered with any of the seven investment promotion agencies (IPAs) for the purpose of availing of tax and other incentives provided by law.

The seven IPAs are the Board of Investments (BoI), Philippine Economic Zone Authority, Clark Development Corp., SBMA, Authority of the Freeport Area of Bataan, BoI-Autonomous Region in Muslim Mindanao and Cagayan Economic Zone Authority.

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