THE Board of Investments (BOI) expects capital inflows to recover by the second half of the year, as commitments from foreign firms overseas, most of which are manufacturers, should be realized by then.
Trade Secretary and BOI Chairman Ramon M. Lopez on Wednesday said investment projects that were pledged before the quarantine are slated to be rolled out in the second half. As such, investment numbers are expected to rise over the next months after suffering declines in the first half on hampered economic activity.
“BOI figures are down up to April because we had no activity. In May and June, we approved some projects already and figures are up about 100 percent. FDIs [foreign direct investments], of course, are affected by the quarantine,” Lopez said, although he has yet to reveal the exact figures for BOI investments.
“What we have to look out for is month-on-month and quarter-on-quarter changes to see if we are recovering economically,” he added. “As for BOI, we continued the processing of approval of projects, so I’m sure there will be a rebound in figures.”
Investments registered with the BOI from January to April crashed 71 percent to P84.1 billion, from P286.7 billion during the same period in 2019.
Capital applied by local firms declined 68 percent to P70.7 billion, from P219.7 billion, while those from foreigners went down 80 percent to P13.4 billion, from P66.9 billion. BOI officials attributed the plunge to the coronavirus pandemic that disrupted business plans worldwide.
On the prospect of recovery, Lopez said some of the manufacturing investments committed last year and in early 2020 will soon be started.
Included in this are the iron and steel projects in southern Luzon and Mindanao, investors of which have apparently just waited for the lockdown to be eased for construction work to begin. Likewise, the trade chief revealed there is an optic producer in Luzon that is eyeing to expand operation.
Details of these investment projects will be released in the BOI’s quarterly report on investment figures, which, according to Lopez, will come out soon.
“There are the usual BPO [business-process outsourcing] investments on financial services that we are expecting to enter as well. However, most of our investment leads are really on manufacturing,” he explained.
Right now, the trade chief said the BOI is focused on communicating once again with the local governments in facilitating the entry of new investors.
Local governments, he added, have been busy with all the social projects the state has been implementing to support households through the quarantine. Now that the lockdown is eased, they can be tapped to help investment promotion agencies get investors to their jurisdictions.
“The lockdown is the reason we really slowed down economic activity. Local government units have been too busy in distributing the social amelioration funds. Because of that, investment processing had to be put to a halt, but not now. We made sure to keep those commitments active and warm so they can come in once the restrictions are relaxed,” Lopez concluded.
Image credits: Bernard Testa
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