The easing of mobility as the country reopened even further in December led to a surge in foreign investment commitments gathered by investment promotions agencies amounting to P192.34 billion in 2021, up from P112 billion in 2020.
BECAUSE of easier mobility as the economy gradually reopened, committed foreign investments in 2021 soared to P192.34 billion in the four quarter, said the Philippine Statistics Authority.
The total approved foreign investment in 2021 is higher than the P112.12 billion in 2020 but still less than half that of 2019 of P390.11 billion.
UnionBank of the Philippines, Inc. Chief Economist Ruben Carlo O. Asuncion attributed the higher foreign investment commitments to the easing of economic and movement restrictions in the fourth quarter 2021.
In November 2021, the government relaxed the restrictions for Metro Manila and other locations to Alert Level 2.
Foreign investments surged almost fourfold year- on- year to P133.47 billion in the October to December period, from the P36.49 billion recorded in the same period in 2020. This was also the highest in nine quarters or since the P182.44 billion recorded in the third quarter of 2019.
Foreign investors may have started to position themselves as the country began reopening the economy in the fourth quarter, Asuncion said.
“They may have also continued original plans initially thwarted by the pandemic,” Asuncion told Business World.
Singapore is top source
Singapore was the top source of approved foreign investment pledges last year with P80.17 billion, eight times more than the P9.10 billion in 2020. Investment commitments from Singapore accounted for 41.7 percent of the total.
Singapore’s investments were “definitely noticeable,” despite its own struggles.
“Even though the Philippines is not at par in terms of the pandemic control and management, Singapore still managed to go after the Philippines for its investments,” he said.
This was followed by the Netherlands and Japan, with investment pledges amounting to P24.54 billion (18.4 percent) and P1.44 billion (1.1 percent), respectively, said Business Mirror.
Approved projects with foreign interest in the fourth quarter of 2021 are projected to generate 19,447 jobs, it added.
Promotion agencies
The PSA data compiles the investment pledges from the government’s seven investment promotion agencies — the Authority of the Freeport Area of Bataan (AFAB), Board of Investments (BoI), BoI-Bangsamoro Autonomous Region in Muslim Mindanao (BoI-BARMM), Clark Development Corp. (CDC), Cagayan Economic Zone Authority (CEZA), Philippine Economic Zone Authority (PEZA) and Subic Bay Metropolitan Authority (SBMA).
This differs from the actual foreign direct investments tracked by the Bangko Sentral ng Pilipinas for balance of payments purposes.
The BoI contributed the biggest chunk of the foreign investment pledges with P151.80 billion, or 78.9 percent of last year’s total.
PEZA was second with P35.83 billion, accounting for 18.6 percent of the total, followed by CDC with P3.68 billion, AFAB with P548.4 million, SBMA with P395.4 million, CEZA with P74.1 million, and BoI-BARMM with P20 million.
In the fourth quarter alone, the information and communication industry received approved foreign investment pledges worth P127.17 billion, accounting for 95.3 percent. This was followed by manufacturing with commitments worth P2.13 billion, as well as administrative and support service activities with P2.08 billion.
Around P1.90 billion of the investment commitments will go to projects in the Cavite-Laguna-Batangas-Rizal-Quezon Region, south of Metro Manila. Central Luzon and the National Capital Region followed with P1.46 billion and P1.17 billion, respectively.
Filipino investors
Meanwhile, investment pledges from Filipino nationals grew annually by 16.3 percent to P273.50 billion in the fourth quarter. It accounted for 67.2 percent of the combined local and foreign pledges worth P406.96 billion, which was also up by 49.8 percent.
Assuming the projects materialize, foreign and local investments pledged during the period are expected to generate 19,447 jobs across industries. This was 20 percent less than the 24,279 projected jobs a year ago.
Asuncion expects foreign investments to improve in the first quarter of 2022, despite the Omicron-driven surge in January.
“Although mobility trends point to more people staying home because of the new variant, the impact on people movement has been short-lived and people are now beginning to move and carry out economic activities more and more compared to the previous January weeks,” he said.
The investment pledges during the quarter were from five investment promotion agencies—BOI, BOI-BARMM, CDC, PEZA, and SBMA.
Tags: #foreigninvestments, #promotionagencies, #easingofmobilitycurbs, #reopening, #economy