Investment pledges drop 27% in 7 months

Combined projects approved by main investment promotion agencies Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) declined 27 percent from January to July compared to a year ago.

Data from the Department of Trade and Industry showed investments approved by the two agencies reached P313.31 billion as of endJuly, down from P427.52 billion in the same period last year.

Investments registered with the BOI alone slid 14.4 percent to P252.32 billion in the seven-month period this year from the previous year’s P294.85 billion.

Those registered with PEZA for the January to July period fell 54 percent to P60.99 billion from P132.66 billion a year ago.

The bulk or 85.5 percent of the approved investments came from domestic sources amounting to P267.91 billion, 29.6 percent lower than the P380.78 billion last year.

Investments from foreign sources also dipped 2.9 percent to P45.40 billion from the previous year’s P46.73 billion.

Among foreign investors, Japan was the biggest source of BOI-PEZA approved investments with a 30.7 percent share amounting to P13.92 billion, 46 percent higher than the P9.54 billion a year ago.

This was followed by Indonesia on second place with P6.44 billion worth of investments (14.2 percent share), and the US on third spot with P4.64 billion (10.2 percent share).

By industry, the electricity, gas, steam and air-conditioning supply had the largest share of BOI-PEZA approved investments in the seven month period at 37.7 percent valued at P118.10 billion, 86 percent higher than the P63.50 billion last year.

Real estate activities came in second with P50.12 billion worth of investments (16 percent share), followed by the manufacturing sector with P40.36 billion (12.9 percent share), transportation and storage with P38.50 billion (12.3 percent share), and construction or public private partnership projects with P32.86 billion (10.5 percent share).

Approved investments of the BOI and PEZA for the January to July period are expected to generate 75,567 jobs, 30 percent lower than the 107,996 jobs in the previous year.

Earlier, BOI managing head Ceferino Rodolfo said investments approved by the agency are targeted to reach P680 billion this year, 10 percent higher than the P617 billion last year.

While PEZA has initially set a 10 percent growth target for approved investments this year, PEZA director general Charito Plaza said last month the agency expects investments to still grow this year, although at a slower pace than the 8.89 percent posted last year due to uncertainties on the proposed second package of the government’s tax reform which seeks to rationalize incentives given to investors.

Investments with the PEZA reached P237.57 billion last year, up from the P218.18 billion in 2016.