The Philippine Board of Investments (BOI) recorded Php645.3 billion of approved investments in the first six months of the year, bouncing back strongly with a 112% surge from just Php304.4. billion in the same period in 2019.
“The robust bounce back despite the pandemic shows the country’s resilience as we begin the transition to easing out the restrictions after a prolonged lockdown of the economy. While we expect a lower GDP output in the second quarter than the first quarter due to the ECQ, there are already signs that the economy is humming back to life with industry conditions becoming stable,” Trade Secretary and BOI Chairman Ramon M. Lopez said.
Secretary Lopez cited that the rebound in investments is expected since the Philippines is still considered one of the top investment destinations with strong economic fundamentals, and direct investments always have a medium to long-term horizon in their investment decisions.
He cited that the country’s manufacturing sector is close to stability as the Philippine Manufacturing Purchasing Managers’ Index (PMI) survey of IHS Markit showed that the manufacturing index score increased to 49.7 in June 2020, up from 40.1 in May. The country recorded an increase in its output index, the first monthly increase in four months. The output index in June was 51.1, coming from a low of 10.2 in April and 29.4 in May. Indices below 50 show a decrease in manufacturing output while above 50 mirrors an improvement of activity. The change in community rules boosted the manufacturing output in making inroads towards stability at the end of the first half of the year. Companies have begun to increase their production as they reopened operations after a long shutdown.
Secretary Lopez added that he expressed optimism that the economy will recover by the third quarter with a positive growth as most of the country is expected to have a relaxed form of community quarantine although he acknowledged that strict social distancing and health protocols will still remain in effect to contain the spread of COVID-19.
Approved investments among domestic sources went up to Php626.7 billion, surging by 166 percent from Php235.6 billion from the same period last year. In contrast, approved figures by foreign businessmen reached Php18.6 billion, a 73 percent deceleration as compared to Php68.9 billion in the same period a year ago.
According to Vice Chairman and BOI Managing Head Ceferino S. Rodolfo, “Construction/infrastructure is the pace-setter among industries with Php530.8 billion as of the first half. The transportation and storage sectors remain strong with Php86.7 billion, a 785 percent improvement from last year’s figure of just Php9.8 billion. Real estate posted a solid a 16.5 percent growth to Php9 billion from Php7.7 billion in 2019. Renewable energy/power, manufacturing and accommodation (tourism) recorded Php6.6 billion, Php5.3 billion and Php3.8 billion in approved projects, respectively. A total of 96 project got the green-signal and upon operations, it will generate 27,082 jobs, a jump of 57.3 percent from 17,214 in the same period last year.”
France remains in the driver’s seat among foreign investors with Php1.5 billion approved investments. Netherlands is runner-up with Php1.06 billion. Japan remains third with Php790 million. Japan is second with Php790 million. Malaysia places fourth with Php601 million and India fifth with Php329 million.
“It is important to highlight the strategic nature of the projects and their important contribution towards building a more modern Philippines. The project proponents have reaffirmed their commitment to the immediate implementation of these infrastructure, ICT and transport projects—towards completion in the medium-to long-term term. Prior to approval of the big-ticket projects, the BOI required them to provide written confirmation of their commitment,” added Sec. Lopez.
Among the recent approvals include San Miguel Aerocity, Inc.’s Php530.8 billion airport project in Bulacan, Seaoil’s Php654 million downstream petroleum project in La Union, Gigasol3 Inc.’s Php2.4 billion 63 MW solar project in Central Luzon, Royale Cold Storage North Inc.’s Php1.5 billion storage facility in Laguna and Heineken International BV’s Php1 billion brewery plant in the Metro.
Regionally, Central Luzon is tops with Php538.1 billion by virtue of the large Bulacan airport; NCR is second with Php85.4 billion; Calabarzon is third with Php9.2 billion; followed by Davao Region (Php4.6 billion) and Northern Mindanao (Php3.2 billion).
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