THE Department of Trade and Industry (DTI) is upbeat that it will hit P1 trillion worth of investment approvals in 2022 despite missing last year’s target as several projects are currently in the pipeline and awaiting approval for incentives.
Trade Secretary Ramon Lopez, in a statement on Tuesday, expressed optimism following the reports of an uptick in foreign direct investment (FDI) net inflows in the country.
“Buoyed by 2021 FDI results as well as the healthy pipeline of strong investment leads—both foreign and domestic, and with the reforms that we are anticipating to still be passed in the next months, we are confident of hitting P1 trillion in BOI [Board of Investments] approved investments this year,” the DTI official said.
Citing data from the Bangko Sentral ng Pilipinas (BSP), DTI noted that FDI net inflows increased to $855 million in October 2021 from $430 million year-on-year. This is the fifth consecutive month that FDI figures registered growth.
In January to October 2021, meanwhile, FDI rose to P8.1 billion from $5.5 billion in the same period in 2020.
“The data released by the BSP are consistent with the figures of the BOI, where a surge of foreign investments by 218 percent was recorded last year. This goes to show that the pandemic did not stop the flow of foreign investments into the country and we are looking forward to getting more in 2022,” Lopez said.
Trade Undersecretary and BOI Managing Head Ceferino Rodolfo, meanwhile, said that investment leads last year are expected to come into fruition by the second or third quarter of 2022.
For example, he said a major P155-billion telecommunication project is awaiting approval from the Fiscals Incentives Review Board.
Other projects in the pipeline also include a new domestic shipping operator; new operator of electric vehicle charging stations; three new operators of telecommunications infrastructure; a new producer of animal feeds; and a cement manufacturer.
Rodolfo, in addition, is also seeing more investments in hyperscalers and Covid-19 medicines, among others.
The BoI said it will prioritize more investments in green and sustainable projects and renewable energy such as hydro and solar plants this year, in addition to road infrastructure, innovation and digitalization.
Last year, the BoI, an attached agency of DTI, approved 235 projects amounting to P655.4 billion, which is below its P905-billion target in 2021 and P1.02 trillion worth of investments greenlighted in 2020.
Among the major projects approved last year are the P81.1-billion Makati City Subway Project and P25-billion Calatagan Cement Plant, BoI noted.
The agency attributed the lower investment approvals to “the rise of Delta cases and extended investors timeline for finalizing studies, decisions, and registrations.”
“Because of the global surge in the Delta variant and now with the emergence of the Omicron variant, these resulted [in] global setbacks in economic recovery, which then translated to the implementation of stricter protocols in the country. We were hit hard during the second quarter and the early part of the third quarter last year,” Rodolfo added.
Initiatives
The BoI said it continued helping businesses to remain operational amid the pandemic.
The agency, for example, said it pushed for the implementation of work-from-home arrangement for the information technology-business process management sector and a policy “allowing the movement of Income Tax Holiday [ITH] for businesses affected by exceptional circumstances for businesses to optimize incentives availed.”
Other initiatives include repurposing of the manufacturing sector for personal protective equipment, local vaccine manufacturing and Covid-proofing activities.
In terms of policies, the BoI said it also backed measures expected to attract more investments. These include the amendments to the Public Service Act, Retail Trade Liberalization Act and Foreign Investment Act.