Q2 foreign investment pledges surge

Foreign investment pledges in the Philippines in the second quarter rose to the highest level in nearly two years, despite muted economic growth and geopolitical uncertainties.   

Preliminary data from the Philippine Statistics Authority (PSA) showed foreign commitments approved by the country’s investment promotion agencies (IPAs) jumped by 68.22% to PHP 115.2 billion in the April-to-June period from PHP 68.48 billion recorded last year.

This was the highest approved quarterly foreign investments since PHP 148.94 billion in the third quarter of 2024.

Quarter on quarter, approved investment pledges more than doubled from the PHP 54.78 billion in the first quarter.

The Netherlands accounted for the bulk or 44% of the total foreign investment pledges with PHP 50.74 billion, followed by Germany with PHP 18.05 billion (15.7%) and Singapore with PHP 9.95 billion (8.6%).

“The surge in investment approvals shows that investors are still willing to bet on the Philippines’ long-term growth story,” Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said in a Viber message.

The Philippine economy posted a weaker-than-expected growth in the second quarter, reflecting the impact of the Middle East conflict and last year’s corruption scandal.

Gross domestic product (GDP) grew by 2.3% in the April-to-June period, the slowest since the pandemic. In the first half, GDP expanded by 2.6%, below the government’s 3.5%-4.5% target for 2026.

In the second quarter, investment commitments were approved by eight out of the 16 IPAs: Philippine Economic Zone Authority (PEZA), the Bases Conversion and Development Authority (BCDA), Board of Investments (BoI), Clark Development Corp. (CDC), Clark International Airport Corp. (CIAC), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport of Bataan and the BOI-Bangsamoro Autonomous Region in Muslim Mindanao (BoI-BARMM).

PEZA approved PHP 79.16 billion worth of investment pledges in the second quarter, accounting for 68.71% of the total.

This was followed by the BCDA with PHP 22.28 billion worth of investment pledges (19.34%) share, BoI with PHP 9.28 billion (8.1% share), and CDC with PHP 2.78 billion (2.42% share).

CIAC also approved investment pledges worth PHP 781.07 million (0.68% share), followed by SBMA with PHP 537.19 million (0.47%), Bataan freeport with PHP 264.06 million (0.23%), and BoI-BARMM with PHP 118.32 million (0.1%).

The Aurora Pacific Economic Zone and Freeport Authority, Bangsamoro Economic Zone Authority, Cagayan Economic Zone Authority, John Hay Management Corp., Phividec Industrial Authority, Philippine Pharmaceutical Manufacturers Association, Tourism Infrastructure and Enterprise Zone Authority, and the Zamboanga City Special Economic Zone Authority did not report any investment pledges in the second quarter.

In the April-to-June period, about 68.4% or PHP 78.71 billion of the total approved foreign investments will go to the manufacturing sector.

Investment pledges for the electricity, gas, steam, and air-conditioning supply reached PHP 8.81 billion or 7.7% of the total, followed by mining and quarrying with PHP 5.8 billion or 5% of the total.

During the period, the Cordillera Administrative Region accounted for 48.4% or PHP 55.74 billion of investment pledges, followed by Central Luzon at 32% or PHP 36.81 billion, and Calabarzon (Cavite, Laguna, Batangas, Rizal, and Quezon) at 12.8% or PHP 14.75 billion.

In the second quarter, the total approved investments from both foreign and Filipino nationals reached PHP 541.51 billion, a 73.1% increase from the PHP 312.87 billion reported in the second quarter of last year.

“Approved investments for the second quarter of 2026 are expected to generate a total of 32,167 employment, reflecting a 21.9% decline from the 41,203 employment expected in the same period of 2025,” the PSA said.

Of this, 27,266 jobs are expected to be generated from approved projects with foreign interest.

In the six months of the year, foreign investment approvals jumped by 76.18% to PHP 169.98 billion from PHP 96.48 billion in the same period a year ago.

The top three recipients of foreign investments in the six-month period include PEZA (PHP 99.12 billion), BCDA (PHP 28.48 billion), and BoI (PHP 14.52 billion).

Leonardo A. Lanzona, an economics professor at the Ateneo de Manila University, said it may take a while for these foreign investment pledges to translate to actual jobs.

“Foreign investment pledges will likely keep growing on paper, but that growth is being driven by a handful of large, capital-intensive projects rather than a broad recovery in investor confidence,” he said in a Facebook Messenger chat. — Beatriz Marie D. Cruz, Senior Reporter