Foreign investments approved down 38% in Q1 —PSA

Total foreign investments approved in the first quarter of 2018 by seven investment promotion agencies totaled P14.2 billion, down 37.9 percent from P22.9 billion a year earlier, the Philippine Statistics Authority (PSA) said on Thursday.

Among the top investing countries were Japan at P7.9 billion, accounting for 55.3 percent of the total commitments.

United Kingdom and Netherlands came in second and third pledging P1.5 billion and P878.5 million, or 10.9 percent and 6.2 percent of the total, respectively.

The investment promotion agencies include the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA) as well as the Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM), and Cagayan Economic Zone Authority (CEZA)

The drop in foreign investment pledges was a result of rising interest rates in the US, Land Bank of the Philippines market economist Guian Dumalagan told GMA News Online Friday.

“It might be more a result of rising interest rates rather than the TRAIN law ... Nevertheless, the plan to rationalize incentives given to some industries could pose a risk to foreign direct investments if not managed properly,” Dumalagan said.

The second package of the comprehensive tax reform program was submitted to Congress early this year. It seeks to reduce corporate income tax rates to 25 percent from 30 percent while rationalizing fiscal incentives. —With a report by Ted Cordero/VDS, GMA News