MANILA, Philippines – After recording a 52 percent drop in investments for the first three months of the year, the government announced that second quarter investments would be better as a South Korean firm finalizes its plan to invest in the country’s renewable energy industry.
“Things started picking up,” Trade and Industry (DTI) Secretary Peter B. Favila told reporters yesterday afternoon. He said the signs are very encouraging. In fact, exports are starting to pick up. “Exports have bottomed out,” Favila said.
According to him food and furniture exporters have started recovering the lost orders they suffered when the global demand started slowing down.
Most importantly, Favila noted that the electronics industry is gaining ground again. “This is good news because this is our number one export,” Favila added.
Aside from the export industry, drivers for growth in the second quarter investments are tourism and the business process outsourcing (BPO) sector.
Favila disclosed that he will be visiting Korea soon where he will meet with a Korean firm that has expressed interest in investing in the country’s renewable energy sector.
Favila said the firm has partnered with a local company. More details are expected as soon as the deal is finalized.
The global crisis has adversely affected the investing climate in the Philippines as approvals for the first quarter of the year decreased by 52 percent. DTI Undersecretary Elmer C. Hernandez reported that investments approvals of the two attached agencies of DTI amounted to P17.98 billion, 52 percent lower than the P37 billion recorded in the same period the previous year.
The Board of Investments (BOI) had P4.3 billion worth of investment for the first three months of the year, down 57 percent from last year’s P9.3 billion. The Philippine Economic Zone Authority (PEZA) on the other hand, recorded P13.7 billion worth of investment approvals or 51 percent lower than the P27.7 billion during the same period in 2008.
“Indeed the global economy is bad and it is reflected in our investment data,” Hernandez explained.
This year, domestic investors tried to make up for the slack left by foreigners as more local firms infused money in the country.
Foreign investment approvals went down by 80 percent in the first quarter of 2009 compared to the same period a year ago. Foreigners contributed only P3.9 billion compared to P19.8 billion last year.