Commitments of foreign investments for the first quarter of 2022 plunged to its 13-year low because of the virus surge in January. The Philippine Statistics Authority based its investment report on six export processing zones.
Foreign investment commitments plunged to its 13-year low from P19.55 billion in the first quarter of 2021 to P8.98 billion in the first three months of 2022, or by 54.1 percent. Reports said this was due to sentiment in January of another virus surge.
The Philippine Statistics Authority based its reported from data obtained from: Authority of the Freeport Area of Bataan (Afab), Board of Investments, Clark Development Corp (CDC), Cagayan Economic Zone Authority (CEZA), Philippine Economic Zone Authority (PEZA) and the Subic Bay Metropolitan Authority.
No investment approvals were reported from BOI-Bangsamoro Autonomous Region in Muslim Mindanao [BOI-BARMM] for first quarter of years 2021 and 2022,” the PSA said.
The data showed foreign investment commitments for the first quarter of 2022 were mainly driven by investments from Japan, which accounted for 39.7 percent of the total approved FI, followed by South Korea at 18.5 percent and Singapore at 18.2 percent, Business Mirror reported.
Japan committed P3.56 billion, while South Korea and Singapore pledged P1.66 billion and P1.63 billion, respectively. Manufacturing bested all other industries as it stands to receive P5.15 billion or 57.4 percent of the total FI pledges.
Electricity, Gas, Steam, and Airconditioning Supply came in second, with investment commitments valued at P1.66 billion or 18.5 percent share, followed by Administrative and Support Service Activities with P977.37 million or 10.9 percent FI contribution.
Calabarzon, Cagayan Valley
PSA data also showed most of the approved foreign investments in the first quarter of 2022 is intended to finance projects in Calabarzon, worth P4.87 billion or 54.2 percent of the total.
This was followed by Cagayan Valley with P1.66 billion or 18.5 percent; and Central Visayas with P986.59 million or 11 percent.
Meanwhile, approved investments of foreign and Filipino nationals reached P190.57 billion in the first quarter of 2022, an increase of 15.6 percent compared with P164.89 billion in the same period of the previous year.
PSA said Filipino nationals continued to dominate the approved investments during the quarter, posting P181.59 billion worth of investment pledges or 95.3 percent share.
Job generation
Total approved projects of foreign and Filipino investors in the first quarter of 2022 were projected to generate 14,416 jobs.
Of the total anticipated jobs for the period, approved projects with foreign interest were projected to generate 9,655 jobs based on the reports of IPAs.
This was also the steepest annual contraction in five quarters or since the 67.5% drop in the fourth quarter of 2020.
Rizal Commercial Banking, Corp. Chief Economist Michael L. Ricafort attributed the contraction in foreign investment pledges to tighter restrictions in January as the capital region and other areas experienced an Omicron-driven surge in coronavirus cases.
“The large foreign direct investments (FDI) in 2021 to a new record high of $10.5 billion could have partly frontloaded some of the foreign investments and partly disrupted by the surge in Omicron variant cases worldwide during the early part of the quarter,” he said.
In 2021, the net FDI inflows jumped by 54.2 percent to a record $10.518 billion, which exceeded the central bank’s $8-billion full-year projection, said Business World.
Different from BSP’s FDI reports
PSA data on foreign investment commitments differ from actual FDIs tracked by the Bangko Sentral ng Pilipinas for the balance of payments. The central bank’s monitoring goes beyond the projects and includes other items such as reinvested earnings and lending to Philippine units via their debt instruments.
These agencies can grant tax and nontax incentives to investors putting up businesses or expanding existing ones in a priority sector.
The PEZA and BoI contributed the bulk of the total approved foreign investment pledges with P4.473 billion (49.8% share) and P4.327 billion (48.2% share), respectively.
More than half of the investment pledges or P5.15 billion would go to manufacturing projects, the PSA said. About 18 percent or P1.66 billion of the pledges will go to electricity, gas, steam, and air-conditioning supply pro-jects.
“The commitments for the first quarter of 2022 were mainly driven by investments from Japan, which accounted for 39.7 percent of the total approved foreign investments, followed by South Korea (18.5 percent) and Singapore (18.2 percent),” the PSA said.
Japan committed P3.56 billion in investments, while South Korea pledged P1.66 billion and Singapore, P1.63 billion.
Tags: #PSA, #foreigninvestmentspledges, #13-yearlow, #economy