Top 10 investments and infrastructure news of 2024

Here is my list of five global investment and five Philippines infrastructure stories of 2024. For foreign direct investment (FDI), I use inward stock or inflows minus outflows per year accumulated through the years, and outward stock. Then I computed the net outward stock to reflect what countries are the net exporters of capital. A negative outward stock FDI means the country is net importer of capital. Data from UN Conference on Trade and Development (UNCTAD) World Investment Report (WIR) 2024 released last June or July.

One, the largest net exporters of capital in Europe are Germany, Netherlands, France, Luxembourg and Switzerland. Their respective net outward stock of FDI in 2023 were $1.051 trillion, $708 billion, $623 billion, $495 billion and $336 billion. The largest net importers of capital are UK with -$925 billion, Poland with -$297 billion and Spain with -$267 billion.

Two, the largest net exporters of capital in Asia are Japan, South Korea and Taiwan. Their respective net outward stock of FDI in 2023 were $1.886 trillion, $398 billion and $390 billion, The largest net importers of capital are Singapore with -$840 billion, China with -$721 billion, India with -$301 billion, Vietnam with -$215 billion and Indonesia with -$174 billion.

Three, in America the only net exporter of capital is Canada. Its net outward stock of FDI was $1.08 trillion. The largest net importers of capital are the US with  -$3.383 trillion, Brazil with -$632 billion and Mexico with -$556 billion.

So the Philippine economic team should target to attract investors from those capital-exporting countries in Europe, Asia and Canada. Investors from East Asian neighbors like Singapore and China should be encouraged to come here too.

Four, UAE, Qatar and Saudi Arabia are modest capital exporters too. Their respective net outward stock of FDI in 2023 were $37 billion, $23 billion and -$12 billion out of Saudi’s total outward stock of $204 billion. Many of their investments other than Europe and US are in Muslim countries in Asia. Muslim regions in Mindanao are good destinations for their capital.

Five, decarbonizing and deindustrializing Germany, UK, others in Europe suffering economically. The average GDP growth in Q1-Q3 2023 and 2024 were 1.1 percent and 0.5 percent for Italy, 0.6 percent and 0.6 percent for UK, zero and -0.2 percent for Germany. Many big German multinationals are cutting their operations in Germany and moving abroad, like BASF, Siemens and VW.

Six, private sector operations and management of the Ninoy Aquino International Airport (NAIA). The New NAIA Infrastructure Corp. (NNIC) led by San Miguel Corp. has officially took over O&M of NAIA last Sept. 14. NNIC offered the government the highest revenue share of 82.16 percent and upfront payment of P30 billion, plus annuity cost of P2 billion.

Seven, another private sector development and operation of Laguindingan International Airport, Bohol-Panglao International Airport. Aboitiz Infracapital got the contracts and the concession agreement for Laguindingan was made last Oct. 28, the concession agreement for Bohol was made on Dec. 18.

Eight, extension of the Tarlac-Pangasinan-La Union Expressway (TPLEX). An additional 59 kilometers to La Union will be constructed worth P23.36 billion. Signing of PPP contract between the Department of Public Works and Highways and San Miguel Holdings Corp. was made last July 10.

Nine, Cavite Extension Project Phase 1 of Light Rail Transit Line 1 (LRT-1). Five new stations from Baclaran were added up to Sucat, inauguration of Phase 1 was made last Nov. 15.

Ten, 43 out of 185 projects in the Infrastructure Flagship Projects or IFP are PPP. The indicative total project cost of these is P2.7 trillion.

I commend the Public-Private Partnership (PPP) Center headed by executive director Cynthia Hernandez. Plus the economic team NEDA, DBM and DOF for providing policy guidance, right of way acquisition funding, and fiscal incentives for the proponents and project implementors of these big private sector-funded infrastructure projects.

Ms. Hernandez is correct in her optimism in saying that “the PPP Center remains dedicated to advancing projects that are economically viable, environmentally sustainable, and socially inclusive. With the PPP Code already in place, we are set to transform the Philippine infrastructure landscape through innovative and impactful PPP projects that will significantly improve the lives of Filipinos.”

The national budget for 2025 was signed by President Marcos last Dec. 30. Budget Secretary Amenah Pangandaman said that P26 billion of DPWH projects and P168 billion of unprogrammed appropriations were vetoed by the President. That means P194 billion of spending cut for the 2025 budget. Good. We should cut spending to cut borrowings that until today is about P2 trillion/year.

Finance Secretary Ralph Recto said in a press statement that total revenue collection for 2024 is expected to reach P4.42 trillion, higher than the full-year target of P4.27 trillion. Good.

Great development in fiscal economics – actual revenues larger than target, and signed budget lower than proposed, P6.326 trillion approved vs. P6.352 trillion proposed. For more infrastructure development, no need to keep expanding the DPWH budget because there are lots of private sector interest to invest in infrastructures so long as the rules are fair and stable.