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Foreign investment commitments up by 30.1% in Q4 2022

Foreign investment commitments or pledges saw a double-digit increase in the last quarter of 2022 amid further reopening of the economy as well as the various foreign trips of President Ferdinand Marcos Jr., which attracted pledges from foreign investors.

Data released by the Philippine Statistics Authority (PSA) showed total foreign investment pledges stood at P173.61 billion in the October to December 2022 period, up by 30.1% from P133.47 billion reported in the same period in 2021.

The said investment commitments were approved by six investment promotion agencies (IPAs), namely the Authority of the Freeport Area of Bataan (AFAB), Board of Investments (BOI), BOI-Bangsamoro Autonomous Region in Muslim Mindanao (BOI-BARMM), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA).

Meanwhile, the PSA said no foreign investment approvals were reported from Cagayan Economic Zone Authority (CEZA), Poro Point Management Corporation (PPMC), and Tourism Infrastructure and Enterprise Zone Authority (TIEZA) for the fourth quarter of 2022.

The bulk of foreign investment commitments for the fourth quarter of 2022 was from Singapore at 64.2%, followed by Japan at 21.5%, and the United Kingdom at 5.9%.

Singapore committed P111.47 billion, while Japan and the United Kingdom pledged P37.41 billion and P10.22 billion, respectively.

Sought for comment, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the improvement in the foreign investment pledges “may have to do with the reopening of the economy towards greater normalcy with no more restrictions as a policy priority… thereby enabling foreign investors to be more decisive to locate/invest/expand in the country amid improved economic/business prospects.”

“The improvement may also have to do with the various investment commitments after the visits of the administration to different countries in recent months,” Ricafort said.

Since he assumed office in the second half of 2022, Marcos has traveled to Indonesia, Singapore, the United States, Cambodia, Thailand, Belgium, China, Switzerland, and Japan.

“Furthermore, CREATE (Corporate Recovery and Tax Incentives for Enterprises) law and other reform measures that eased foreign ownership limits/restrictions since the pandemic also helped attract more foreign investments into the country,” the economist said.

The CREATE law slashed the country’s corporate income tax to 25% from 30% and rationalized fiscal incentives.

The PSA said out of all investment pledges raked in during the last quarter of 2022, Information and Communication bested all other industries as it stands to receive P114.29 billion or 65.8% of the total commitments.

Real Estate Activities came in second with investment commitments valued at P35.57 billion or 20.5% share, followed by Manufacturing with P19.30 billion or 11.1% contribution.

In terms of geographic locations, the biggest chunk of the approved foreign investment in the fourth quarter of 2022, amounting to P101.36 billion or 58.4% of the total, was intended to finance projects classified as “nationwide” or situated in various regions of the country.

This was followed by the Ilocos Region with P32.66 billion or 18.8%, CALABARZON with P30.71 billion or 17.7%, and Central Luzon with P5.70 billion or 3.3%.

Meanwhile, the combined investment commitments of both foreign and Filipino nationals reached P478.16 billion in the fourth quarter of 2022, up 17% from P408.54 billion in the same quarter of 2021.

Filipino nationals contributed P304.55 billion or 63.7%, while the balance of 36.3% were from foreigners.

The PSA said projects of approved investments of both foreign and Filipino nationals in the fourth quarter of 2022 were projected to generate a total of 37,766 employment.

Out of this total anticipated employment for the period, approved projects with foreign interest were projected to generate 23,364 jobs, the agency said. —VAL, GMA Integrated News