PSA: Foreign investment pledges to Philippines down 32.9% in Q1

Total foreign investments the Philippine government has approved posted a double-digit decline in the first quarter of 2021 amid the challenges due to the COVID-19 pandemic, Philippine Statistics Authority's data shows.

PSA data released on Thursday shows the FI in the January to March period stood at P19.55 billion, down 32.9% from P29.14 billion in the same period in 2020.

Approved investments are not actual investments but rather commitments by foreign entities, which may come in the near future.

First Quarter 2021 investments were pledges from six investment promotion agencies (IPAs), namely the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB), and Cagayan Economic Zone Authority (CEZA).

No investment approvals were reported from BOI-Bangsamoro Autonomous Region in Muslim Mindanao (BOI-BARMM) for the reference quarter, according to the PSA.

FI commitments for the first quarter of 2021 were mainly driven by investments from Japan which accounted for 54.8% of the total approved FI, followed by Cayman Islands at 5.8% and South Korea at 3.0%.

Japan committed P10.72 billion, while Cayman Islands and South Korea pledged P1.14 billion and P592.63 million, respectively.

Manufacturing stands to receive 57% or P11.14 billion of the total FI pledges.

Information and Communication came in second with investment commitments valued at P4.58 billion or 23.4% of the total.

Coming next is Real Estate Activities with P2.24 billion or 11.5% of the FI pledges during the period.

By region, majority of the FI commitments in the first quarter of 2021 is intended to finance projects in Region IVA-CALABARZON amounting to P7.54 billion or 38.6% of the total.

This was followed by Region VII or Central Visayas with P2.73 billion or 14% of the total and the National Capital Region with P1.74 billion or 8.9% of the pledges in the period.

Approved projects with foreign interest in Q1 of 2021 were projected to generate 18,416 jobs based on reports of the Investment Promotion Agencies (IPA), the PSA said.

Similarly, the Philippine economy as measured by gross domestic product (GDP) contracted by 4.2% in the first quarter of the year, marking the fifth straight quarter that the country’s economic performance is in the negative territory. —LBG, GMA News