By Ian Nicolas P. Cigaral | Philippine Daily Inquirer
November 15, 2023
MANILA -Committed foreign direct investments (FDI) in the country’s economic zones more than doubled in the third quarter, thanks to the Marcos administration’s efforts to sell the Philippines as an investment destination.
The government approved a total of P27.30 billion FDI pledges in the July-September period, up 109.3 percent year-on-year, the Philippine Statistics Authority (PSA) reported on Tuesday. The figure represents FDIs committed to the country’s ecozones, whose main charm is the tax perks that they offer to investors.
These pledges may or may not translate to actual inflows in the future, but they are a closely-watched indicator of investor sentiment.
According to the PSA, the promised investment in the third quarter could potentially create 22,571 jobs in the Philippines, 20.7 percent lower than the 28,458 expected employment from pledges approved a year ago.
The PSA’s data is different from the Bangko Sentral ng Pilipinas’ (BSP) own tracking of FDI inflows, which is on a net basis.
The BSP forecasts FDIs to end the year with a net inflow of $8 billion which, if realized, would be lower than the $9.4 billion net inflow recorded in 2022.Leonardo Lanzona, economist at Ateneo De Manila University, said the year-on-year growth in FDI pledges last quarter reflects commitments from investors that President Ferdinand Marcos Jr. secured during his recent trips overseas.
But Lanzona said Mr. Marcos should make sure that these commitments would materialize in order to justify government spending on costly travel missions abroad.
“Given the cost of these investment roadshows, one can ask if these pledges are worth their costs. In addition, one must include their opportunity costs because the resources could have been better spent in education and health for the majority,” he said.
Broken down, P18.33 billion worth of pledges were approved by the Philippine Economic Zone Authority, the country’s largest ecozone. That amount was 98.2 percent bigger compared with a year ago.
FDI bets placed on the Board of Investments grew 73.5 percent year-on-year to P3.74 billion. Among the ecozones, the Clark Development Corp. was the only one in the red after pledges there sagged at an annualized rate of 29 percent to P968.17 million in the third quarter.
The manufacturing industry received the largest amount of approved investments at P16.43 billion, cornering a 60.2-percent share. By country of origin, Singapore posted the highest investment commitment amounting to P13.04 billion.