The reported negative buzz created by President Duterte’s bloody war against illegal drugs in the international community apparently failed to drive investors away from the Philippines, as investment pledges approved by the Board of Investments (BOI) reached P616.7 billion this year, the agency’s best performance in its 50-year existence.
And China, the preferred ally of the Duterte administration, is not even on the list of top 5 country sources of investments reported by the BOI on Monday.
Trade Secretary and BOI Chairman Ramon M. Lopez said the cumulative cost of the fresh projects registered with the investment-promotion agency for full-year 2017 surpassed the previous administration’s biggest haul of P466.03 billion and 1997’s P570.1 billion, the previous all-time high.
“The BOI’s previous highest approved investment level was in 1997, recording P570.1 billion mainly from investments due to the privatization and deregulation of public utilities [water supply and telecommunications] at the time,” Lopez told reporters.
The 2017 figure is 39.5 percent higher than the P442 billion registered in 2016. Earlier in the year, the BOI projected investments to reach P500 billion in line with its 50th founding
anniversary this year.
The number of approved new ventures this year—426 projects—beat last year’s 378 projects by 13 percent. The BOI-approved new projects are expected to generate around 76,065 jobs when they go into full operations, up 12.5 percent from last year’s 67,634 expected employment opportunities created.
“The momentum of our 6.9-percent GDP growth in the third quarter and 6.7-percent overall growth for the first nine months has definitely carried over in the fourth quarter investment-wise, and further boosted with the frenzied economic activity given the holiday season,” Lopez said in a statement.
Duterte, since the onset of his administration last year, has been receiving rebuke from the international community because of his war against illegal drugs, which already resulted in the death of thousands of drug couriers, although branded by many as extrajudicial killings.
According to Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo Jr., the surge in investments for the year is mainly due to the designation of focused strategic sectors under the 2017 Investments Priorities Plan (IPP), particularly infrastructure and power projects. The strong growth of domestic demand was also a major driver.
Power and energy projects remained as the top performing sectors, with P268.168 billion in approved investments, followed by infrastructure and PPP projects with P127.658 billion. This boost in infrastructure is credited to the ramping up of construction activity for the government’s “Build, Build, Build” program. For manufacturing, as listed in the 2017 IPP, investments were channeled anew to key industries, such as cement, sugar and petrochemicals.
Investments in the manufacturing sector increased almost three fold, or by 256 percent, to P96 billion in 2017, from only P27 billion in 2015. The figure is also 95 percent higher than the P 49.259 billion reported in 2016.
The manufacturing sector is the third top-performing sector for the year. Real estate and mass-housing projects ranked fourth with P86 billion, while transportation and logistics came in fifth with P15.909 billion.
Japan is the top source of BOI-approved foreign-investment projects for the year with P 8.864 billion, mainly in green ship recycling, chemicals and glass manufacturing, among others. This was followed by Singapore, with P3.497 billion, Australia with P1.996 billion, British Virgin Islands with P1.084 billion—all in renewable energy—and The Netherlands with P1.074 billion (manufacturing).
Per region, a decrease by 53 percent in investment approvals was noted in the National Capital Region (NCR). Region 4-A (Calabarzon) emerged as the top destination for BOI-registered investments with P 294.6 billion, or a 48-percent share in the total approved investments. Region 3 (Central Luzon) followed with P 123.3 billion, while NCR was only at third with P 44.3 billion. Significant investments were noted in Regions 1 (Ilocos Region) with P 39.6 billion and Region 7 (Central Visayas) with P 35.6 billion.
As locational restriction was relaxed in the 2017 IPP, significant increases in investments were noted. “This validates business confidence in President Duterte’s economic programs to ensure inclusive growth and shared prosperity for the country. The influx of investments is definitely steamrolling, as we are expecting sustained higher investments for the next five years,” Lopez said.
The BOI only targeted P500 billion in fresh approvals this year. “But to blitz past the P600-billion mark is something we are definitely ecstatic for, as this only proves the continuing confidence of the investors in making their business grow in the Philippines.”
“The increase in infrastructure projects this year supports the BOI’s push for the growth in economic activities outside Metro Manila and the Build, Build, Build, or the massive infrastructure program of the administration,” Rodolfo noted. “While BOI incentives are directed for strategic domestic projects, a number of foreign-investment projects also registered with BOI.”