British International Investment, UK Export Finance bullish on PH

The British International Investment (BII) and UK Export Finance (UKEF) have expressed optimism about investing in the Philippines, particularly in renewable energy, citing the country’s favorable operating environment.

BII Managing Director and Asia Head Srini Nagarajan said the UK government plans to invest £500 million (around US$672 million or roughly P38.5 billion) in Southeast Asia from 2022 to 2026, targeting the Philippines, Indonesia, and Vietnam.

This planned investment is equivalent to roughly US$672 million or about P38.5 billion as of 11 a.m. on Monday, March 2, according to currency exchange site Wise.

Of that amount, about $400 million (around P23 billion) has already been committed, with the remainder expected to be allocated this year.

“The Philippines is an important market for us… It’s conducive in terms of the operating environment, policies, and other factors. Our intention to invest here is actually quite high,” Nagarajan said in an interview.

Currently, BII—the United Kingdom’s development finance institution—focuses on the climate and infrastructure sectors in Southeast Asia, which Nagarajan described as “the need of the hour” given the region’s high carbon emissions and funding gaps.

“In the three main markets of renewable energy generation, the Philippines will stand number one. The renewable energy potential and existing capacity are very high,” he said, adding that energy demand is expected to rise alongside GDP growth.

This comes after the Department of Energy (DOE) in November 2022 amended the implementing rules and regulations of the Renewable Energy Act of 2008, allowing foreign investors to participate in the Philippine renewable energy sector.

The administration of President Ferdinand “Bongbong” Marcos Jr. is also considering amendments to the Electric Power Industry Reform Act (EPIRA) to lower electricity costs nationwide.

“I think the Philippines is doing a good job encouraging renewable energy. In terms of policy environment, energy needs, and lower execution risks, the country stands out,” Nagarajan added.

In a separate interview, UKEF Country Head for Malaysia, the Philippines, and Thailand Valentino Dass said the agency is considering financing up to £5 billion (about US$6.7 billion or roughly P385 billion) for both government and private-sector projects in the Philippines.

“We are keen on strategic sectors such as transportation infrastructure, offshore wind, and healthcare if opportunities arise. That reflects our market risk appetite, and we want to do more in the Philippines,” Dass said.

UKEF offers loan tenors of seven, 15, and 22 years, depending on the project type—rail projects, for instance, typically require longer terms.

“We are working on a financing framework for sovereign-related transactions. While that is ongoing, we can also support private-sector projects,” Dass said.

Over the past two years, UKEF has been increasingly focused on the Philippines. Last year, it closed a 12-year loan for Philippine Airlines to finance a Rolls-Royce Trent XWB-97 engine.—MCG, GMA Integrated News