By Abigail Marie P. Yraola, Searcher
Foreign investment APPROVED commitments more than doubled in the second quarter from a year ago as the Philippine economy continued to reopen amid looser mobility restrictions.
The value of foreign liabilities stood at 46.231 billion pesos from April to June, up 105 percent from 22.503 billion pesos a year earlier, preliminary data from the Philippine Statistics Authority showed on Tuesday ( PSA).
This is the highest since the 133.471 billion pesos recorded in the last three months of 2021.
The triple-digit increase in the second quarter was the fastest since growth of 265.8% in the fourth quarter of 2021.
The Netherlands was the main source of investment commitments approved in the second quarter with 19.037 billion pesos, followed by Singapore and Japan with commitments worth 15.887 billion pesos and 6.508 billion pesos respectively. .
Security Bank Corp. chief economist Robert Dan J. Roces said the approved investment pledges bode well for the economic recovery.
“Recall that one of the drivers of the 7.4% growth in gross domestic product in the second quarter was the increase in capital formation, with a significant contribution from (foreign direct investment),” he said. he stated in an email interview.
Preliminary PSA data showed the economy grew 7.4% in the second quarter, slower than the 12.1% in the same period a year earlier and 8.2% in the first quarter.
“Factors include improved mobility, which has enabled more investment, and improved confidence in the Philippine economy,” Roces said.
Most parts of the country have been under the most lenient Alert Level 1 since March. Economic activity was boosted by the easing of travel restrictions and election spending.
Asian Institute of Management economist John Paolo R. Rivera also attributed the higher investment pledges to “renewed optimism for the economy given a new administration and improving economic performance.” investment climate due to the lagged effects of the fiscal monetary policy implemented before”.
Ferdinand R. Marcos. Jr. won a landslide victory in presidential elections on May 9 and took office on June 30.
The PSA said 41.7% or 19.295 billion pesos of approved foreign investment would go to real estate activities. Investments in the transport and storage sector amount to 14.524 billion pesos, followed by manufacturing at 6.154 billion pesos.
In the second quarter, investment commitments were approved by five investment promotion agencies – Board of Investments (BoI), BoI-Bangsamoro Autonomous Region in Muslim Mindanao, Clark Development Corp., BoI Authority Economy of the Philippines (PEZA) and the Subic Bay Metropolitan Authority.
The SBMA approved most or 71.3% of the total, which reached 32.983 billion pesos. The PEZA has approved commitments worth 9.322 billion pesos, while the BoI has approved commitments of 3.538 billion pesos.
The Poro Point Management Corp. and the Tourism Infrastructure Economic Zone Authority did not approve investments for the second quarter of 2022 and 2021.
Almost three-quarters or 33.935 billion pesos of foreign investment pledges will fund projects in central Luzon. Central Visayas took 3.938 billion pesos or 8.5% of the total, while Calabarzon – the region that includes Cavite, Laguna, Batangas, Rizal and Quezon – got 3.701 billion pesos or an 8% share.
If these foreign commitments materialize, these projects will generate 12,626 jobs, or 25.8% less than the 17,013 additional jobs expected in the same quarter of 2021.
Meanwhile, investment pledges from Filipinos reached P53.38 billion in the second quarter.
This brought total pledges to P99.611 billion, with Filipinos accounting for 53.6% of the total.
If investor sentiment improves further, Roces said foreign exposure would increase.
“Downside risks remain on global inflation, but lower global commodity prices should provide some relief in the final quarter, and investment should flow in,” he added.
PSA data on foreign investment commitments differs from actual FDI tracked by the Bangko Sentral ng Pilipinas (BSP) for balance of payments. Central bank oversight goes beyond projects and includes other items such as reinvested earnings and lending to Philippine units through their debt instruments.
Meanwhile, PEZA aims to attract more investment from Australia and New Zealand.
“Of the target sectors we are looking at, the best bets would come from manufacturing and information technology, data centers, telecommunications and agriculture,” PEZA official and Tereso O told reporters. Panga on the fringes of Pacific Business. Philippines investment fact-finding mission on Tuesday. “Also on mineral processing due to the status of the Philippines being the fifth most mineralized country in the world”,
Delegates from Australia and New Zealand will attend briefings and meet potential developers for setting up their businesses in the Philippines, he said.
“We expect investments to be made as part of this investment mission. They have been working there since the pandemic and their coming here is surely a sign of their keen interest in investing in the Philippines,” Mr. Panga said.
He said there were 138 Australian companies registered with PEZA in June. Companies are involved in shipbuilding, business process outsourcing, call centers, software development, engineering, architecture and other design services.
Some of the major Australian companies registered with PEZA include Austal Philippines, ANZ Global Services and Operations (Manila), Inc., RD Environmental Solutions, Inc., Telstra International Philippines, Inc. and QBE Group Shared Services Ltd. – Philippines Fork.
“These companies contribute 14.632 billion pesos of investments, generate 351.944 million dollars of exports and have created 43,033 direct jobs,” Mr. Panga said.
Three New Zealand companies were registered with PEZA as of June this year, he added. The companies are engaged in rubber and plastic products, business process outsourcing, engineering, architecture and other design services.
Mr. Panga said PEZA was looking at other countries for potential investment opportunities.
“In addition to Australia and Japan, we reach out to non-traditional sources of investment and trade. Members of the Regional Comprehensive Economic Partnership (RCEP) would be a good start such as China, Australia and New Zealand. The Middle East also has good potential. Also the European Union because they see the Philippines as their potential base in the region for their logistics hub,” he said.
“RCEP and other free trade agreements ‘will help diversify the country’s exports in terms of products and services and domestic destinations and enhance the country’s attractiveness for foreign investment,’ he added. — with Revin Mikhael D. Ochave