The Board of Investments (BoI) said on Tuesday that approved investment commitments more than tripled in the first six months, driven by an increase in renewable energy projects after the Philippines opened the sector to full foreign ownership.
In a statement, the BoI said it approved PHP 698 billion worth of investments from 155 projects during the January-to-June period. This was more than three times the PHP 230 billion worth of investments from 108 projects a year ago.
The renewable energy sector accounted for three-fourths or PHP 536.5 billion of the approved investments in the six-month period. This consisted of 30 projects in solar, wind, hydropower and biomass projects.
Investor interest in renewable energy increased after the government allowed full foreign ownership in the sector in November. Foreign ownership of renewable energy projects used to be limited to 40%.
The BoI also approved eight information technology (IT) projects worth PHP 95.5 billion; five transportation and storage projects worth PHP 21.3 billion; 21 manufacturing projects worth PHP 16.1 billion; and 11 agriculture projects worth PHP 6.4 billion.
Foreign investment approvals made up 60% or PHP 423 billion out of total approvals, up 52-fold from PHP 7.89 billion a year ago.
Germany led all countries with PHP 393 billion worth of approved investments, followed by Singapore (PHP 16.8 billion), the Netherlands (PHP 3.57 billion), France (PHP 2.04 billion), and the United States (PHP 1.9 billion).
Meanwhile, local investment approvals reached PHP 275 billion, up by 24% from PHP 222 billion a year ago. Investments in Western Visayas reached PHP 306 billion, followed by Calabarzon (PHP 164 billion), the Ilocos Region (PHP 55.5 billion), Central Luzon (PHP 28.7 billion), and the National Capital Region (PHP 25.6 billion).
“The increasing number of investment approvals reflects the growing attractiveness of the Philippines as an investment destination and highlights the country’s potential for further economic growth and development,” BoI Chairman and Trade Secretary Alfredo E. Pascual said.
The BoI said the new investments are expected to generate 29,965 jobs, up by 96% from 15,301 jobs projected in the same period last year.
“The Philippines is poised to become Asia’s premier investment destination. The signs are emerging. Foreign investment pledges are at a record high,” he added.
Calixto V. Chikiamco, Foundation for Economic Freedom president, said in a Viber message that the increase in approved investments could be attributed to recent economic reforms passed during the Marcos and Duterte administrations.
“It is probably due to the renewable energy liberalization by the Marcos administration plus other liberalization measures passed during the Duterte administration,” he said.
Aside from opening the renewable energy sector to foreign ownership, the government also amended the Public Service Act, Foreign Investment Act and the Retail Trade Liberalization Act to attract more investments.
“Increased investment commitments from the administration’s foreign trips since last year could help further boost foreign investments in the coming months,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.
Mr. Chikiamco said the BoI could hit its PHP 1.5-trillion investment approval target this year.
“It is highly probable (to hit the target) especially if global interest rates fall,” he said.
Mr. Ricafort said the country’s participation in the Regional Comprehensive Economic Partnership (RCEP) trade deal could boost investments.
“The membership of the country in RCEP, which is the world’s largest free trade agreement led by China, would help attract more foreign investments into the country,” he said.
The RCEP, which took effect for the Philippines on June 2, is a trade deal participated in by the 10 Association of Southeast Asian Nations member states, Australia, China, Japan, Korea and New Zealand. It is projected to boost trade among participating nations following the application of lower or zero tariffs. — Revin Mikhael D. Ochave