Foreign investment pledges decline by 22.4% in Q3

Foreign investment commitments or pledges saw a double-digit decline in the third quarter of the year as investor appetite was dampened by global recession concerns and a high inflation environment.

Data released by the Philippine Statistics Authority (PSA) showed total foreign investment pledges stood at P13.05 billion in the July to September period, down by 22.4 percent from P16.82 billion posted in the same period last year.

The total investment pledges were approved by the country’s four investment promotion agencies, namely the Board of Investments (BOI), Clark Development Corporation, the Philippine Economic Zone Authority, and the Subic Bay Metropolitan Authority.

Meanwhile, the PSA said no foreign investment approvals were reported from the Authority of the Freeport Area of Bataan, BOI-Bangsamoro Autonomous Region in Muslim Mindanao, Cagayan Economic Zone Authority, and the Tourism Infrastructure Economic Zone Authority for the third quarter of years 2021 and 2022.

Sought for comment, Trade Undersecretary Ana Carolina Sanchez told GMA News Online that the decline in investment pledges in the third quarter was “still partly a result of the global recession pushed by increasing inflation and interest rates, rising energy prices from the Russia-Ukraine war.”

Nonetheless, Sanchez said the government is doubling efforts to engage investors and enhance the investment climate in the country.

The foreign investment commitments for the third quarter were mainly driven by investments from Japan, which accounted for 34.5 percent of the total, followed by South Korea (15.5 percent) and Singapore (12.6 percent).

Japan committed P4.50 billion while South Korea and Singapore pledged P2.02 billion and P1.64 billion, respectively.

The PSA said manufacturing bested all other industries as it stands to receive P7.20 billion or 55.2 percent of the total pledges.

Administrative and support service activities came in second with investment commitments valued at P3.38 billion or 25.9 percent share, followed by real estate activities with P1.35 billion or 10.3 percent contribution to the total.

The lion’s share of foreign investment pledged during the period was intended to finance projects in Calabarzon amounting to P6.60 billion or 50.6 percent of the total.

This was followed by Central Luzon with P3.02 billion or 23.1 percent contribution and National Capital Region with P2.24 billion or 17.1 percent share.