BOI-approved foreign investments drop 73% in first half as virus spook investors

MANILA, Philippines (Corrected 10:07 p.m.) — Foreign investment pledges approved by the Board of Investments (BoI) sank by more than 70% in the first half as investors abroad hold off expansion plans amid the onslaught of the coronavirus pandemic.

Data from the Department of Trade and Industry (DTI) released Monday showed BOI-approved pledges by foreign businessmen sagged 73% in the first six months of the year to P18.6 billion, lower than P68.9 billion registered in the same period in 2019.

By country of origin, commitments from France continued to account for the biggest share of approved FDIs in the first semester at P1.5 billion, followed by Netherlands (P1.06 billion), Japan (P790 million), Malaysia (P601 million) and India (P329 million).

On the flip side, BOI-approved pledges by Filipino businessmen soared 166% year-on-year to P626.7 billion from January to June, data showed.
 
If both foreign and domestic commitments are combined, total BOI-approved investment in the first half stood at P645.3 billion, 112% higher compared to the same period last year. By industries, the construction and infrastructure sectors cornered bulk of total investments at P530.8 billion, followed by transportation (P86.7 billion) and real estate (P9 billion).

"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," Trade Secretary and BOI Chairman Ramon Lopez said.

The BOI is among the economic zones where the government offers tax and non-tax breaks to lure in locators and provide jobs to people. As part of its planned stimulus measures, the government is banking on these incentives — and a 5% instant cut on corporate income tax rate — to lure back foreign investments potentially lost during the pandemic, as well as new ones.

According to the DTI, the BOI greenlighted 96 projects as of June that, once operational, will generate 27,082 new jobs for Filipinos, up 57.3% annually.

"It is important to highlight the strategic nature of the projects and their important contribution towards building a more modern Philippines," Lopez said.

"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,” he added.

Editor's note: An earlier version of this article referred to the Bureau of Investments. This has been corrected to Board of Investments.