Investment pledges down 71% in January to April due to COVID-19

Investment pledges recorded by the Board of Investments (BOI) declined in the first four months of 2020 on the back of economic slowdown brought by the COVID-19 pandemic.

In January to April, investment commitments stood at P84 billion, down 71% from P286.7 billion recorded in the same period last year.

“The downturn is expected due to the COVID-19 pandemic where economic activities and investments are disrupted due to lockdowns around the world. We have to prepare for a v-shaped recovery with a Bounce Back Plan (of the National Government),” BOI chairman and Trade Secretary Ramon Lopez said.

“The economy demonstrated its resilience, contracting by just 0.2% in the first quarter of the year —better performance even if compared with developed countries whose contractions have been from anywhere between 4 to 7%. The risk of global recession is real but for our part, we are making sure that this is only transitory and we are already laying the foundation for our recovery,” Lopez said.

Investment pledges from domestic sources reached P70.7 billion, down 68% from P219.7 billion year-on-year.

On the other hand, approved projects by foreign investors reached P13.4 billion, decelerating by 80% from P66.9 billion a year ago.

Per sector, investment commitments from transportation and storage sector figures reached P60.2 billion, accounting for 71% of the total investment figures.

The balance went to real estate at P8.8 billion, manufacturing at P5.3 billion, power at P4.2 billion and accommodation at P3.8 billion.

A total of 70 projects got the nod and once fully operational, these will translate to 11,055 jobs, according to the BOI.

France is tops among foreign entities with P1.5 billion in capital. It is followed by Japan with P790 million investment pledges.

Malaysia placed third with P601 million. Meanwhile, India and the United Kingdom complete the top five with P325 million and P156 million, respectively.

“During the past two months, the role of the BOI had shifted to providing support for firms— particularly those allowed to operate during the various phases of the quarantine period—to continue business operations and facilitate continuity in their value chain. While the actual approved figures are down, this is partly because there are investment projects which we have chosen to carefully re-confirm with proponents their commitment to pursue even in this environment. So far, the investors remain solidly optimistic about the medium-to-long-term prospects of the country,” BOI Managing Head Ceferino Rodolfo said.

Lopez also expressed gratitude to the business community as, in addition to the actual investment projects, the private sector has been quick to respond to the needs of the country in terms of re-purposing their manufacturing capabilities towards essential goods needed in the fight against COVID 19.

“For example, given the export bans imposed by other countries, we have been working hard to increase local production of medical grade masks for our frontliners. As a result, from a pre-COVID capacity of just about 7 million masks and all directed to the export market; the Philippines, by end of this month, would already have an actual capacity level of close to 25 million masks for the domestic market,” the Trade chief said.

Lopez noted that similar public-private collaborations have been undertaken for other critical products including ventilators, face shields, medical coveralls, and rubbing alcohol and disinfectants—where companies have re-purposed their manufacturing facilities to produce these. —AOL, GMA News