MANILA, Philippines — Foreign investment pledges registered with investment promotion agencies (IPAs) surged by 109.3 percent in the third quarter from a year ago, according to the Philippine Statistics Authority (PSA).
Data from the PSA yesterday showed total foreign investments approved by IPAs in the third quarter amounted to P27.30 billion, higher than the P13.05 billion in the same period last year.
“These investments were pledges from the following IPAs, namely: Authority of the Freeport Area of Bataan, Board of Investments, Clark Development Corp., Cagayan Economic Zone Authority, Philippine Economic Zone Authority, Subic Bay Metropolitan Authority and Zamboanga City Special Economic Zone Authority,” the PSA said.
According to the PSE, the approved foreign investments in the third quarter are expected to generate 19,192 jobs.
Sought for comment, Oikonomia Advisory and Research Inc. president and chief economist John Paolo Rivera said in an email that the increase in approved foreign investments “may be a result of the relatively stronger economy compared to neighboring economies, albeit persistent high inflation and interest rates.”
Last week, National Economic and Development Authority Secretary Arsenio Balisacan said the 5.9-percent growth posted by the economy in the third quarter is the fastest among the major emerging economies in Asia that have released their gross domestic product growth during the period.
Rivera said the increase may also be an effect of government reforms such as the Ease of Doing Business Act, as well as amendments to the Public Service Act, Retail Trade Liberalization Act and Foreign Investments Act to attract investors to the country.
“Given these laws, investors may enter the Philippines in the future,” he said.
Aside from the country’s economic growth and government reforms, Rizal Commercial Banking Corp. chief economist Michael Ricafort said other factors that supported the increase in approved foreign investments are the country’s attractive demographics as well as the country’s free trade agreements including the world’s biggest free trade deal, the Regional Comprehensive Economic Partnership agreement.
“The said factors would continue to sustain the continued growth in foreign direct investments into the country, going forward,” he said.
Singapore was the Philippines’ biggest source of approved foreign investments as it accounted for P13.04 billion or 47.8 percent of the total in the third quarter.
This was followed by Taiwan with P3.63 billion (13.3 percent), and United Kingdom with P3.06 billion (11.2 percent).
In terms of sectors, manufacturing received the largest amount of approved foreign investments at P16.43 billion or 60.2 percent of the total in the third quarter.
Administrative and support service activities placed second with P4.28 billion or 15.7 percent share, while real estate activities ranked third with P4.22 billion or 15.5 percent share.
Among the regions in the country, 53.3 percent of the approved foreign investments in the third quarter were for projects in CALABARZON amounting to P14.56 billion.
Central Luzon came in next with P6.13 billion or 22.4 percent share, followed by Central Visayas with P3.87 billion or a 14.2 percent share.
Approved investment pledges from foreign sources and Filipino nationals reached P83.50 billion in the third quarter, down 47.6 percent from P159.38 billion in the same quarter of last year.
Investments from Filipino nationals amounted to P56.19 billion in the third quarter.