Investments registered with the Philippine Board of Investments (BOI) doubled in the first six months of 2016, reaching P186.51 Billion, or higher by 103% from the P92.02 billion posted in the same period last year.
As the numbers already cover May and June, the growth is indicative of continued investor confidence as the country transitions to the Administration of President Rodrigo Duterte. “Sustained impressive investment performance validates the announced economic policy direction of the new administration” said Trade Secretary Ramon Lopez. BOI-approved investments in June 2016 grew by 254% compared with same month of the previous year. Secretary Lopez further said, “The challenge is ensuring that these investments benefit the poorest of the poor. The administration will be embarking on measures to make investments more inclusive through, among others, providing linkages with Micro, Small and Medium Enterprises (MSMEs), to the agricultural sector, and to the marginalized geographic regions.”
Buoyed by power and transportation infrastructure projects, the increase in investments registration figures were generated from 162 projects which are expected to create some 30,207 jobs when fully operational.
Power generating plants and renewable energy projects take up the bulk of the approved investments in the first semester, accounting for 51% of the total. Investment commitments in the sector surged by 402% to P95.95 Billion from only P19.10 Billion recorded in the same period last year. These were generated from 34 power projects, supplying additional capacity of 1,034.12 MW in most parts of Luzon, particularly, in Region IV-A where most industries are located.
The power projects include the Limay Premier Power Corporation’s P23.30 Billion 300-megawatt fluidized bed coal fired power plant in Bataan, and two renewable energy projects namely the Bayog Wind Power Corporation’s P14.73 Billion power plant with a generating capacity of 150 megawatts, and the Cordillera Hydro Electric Power Corporation’s P12.18 Billion power plant with a generating capacity of 60 megawatts.
The transportation infrastructure sector placed second with P31.90 Billion in investment commitments or 17% share. The investment amount is higher by 282% from the P8.36 Billion approved during the same period in 2015. The transport projects include GMR Megawide Cebu Airport Corporation’s P16.75 Billion Cebu International Airport Project, a public-Private Partnership (PPP) project which will involve the operation and maintenance of the Cebu Airport’s Terminal 2; and the Light Rail Manila Corporation’s P15.15 Billion Manila Light Rail Transit 1 Integrated Railway System Project which will involve the operation, maintenance, and modernization of the existing light rail system.
The development of low-cost and economic mass housing projects maintained its position as third placer among the top contributors in the period, gaining 20% of the total investment commitments worth P24.39 Billion. In addition to the National Capital Region, these projects were dispersed in Regions III, IV-A, V, VII, IX and XI.
On the other hand, manufacturing sector, whose growths continue to drive the economy in the first quarter, placed fourth, contributing a total of P18.61 Billion during the period or an increase of 9% from last year’s record of P17.14 Billion.
As a subsector of the manufacturing industry, processed food products projects was the highest with investments worth P8.14 Billion. Major contributors for the sector include San Miguel Corporation’s animal feed production in Davao del Sur and Bulacan worth P3.98 Billion, Biotech Farms Incorporated’s milled rice and by-products project worth P1.10 Billion, and Roxas Sigma Agriventures, Inc.’s various coconut products project in South Cotabato worth P830.50 Million.
With the successful rollout of the Comprehensive Automotive Resurgence Strategy (CARS) Program early this year, the motor vehicle parts and components subsector attracted P7.80 Billion in substantial investments for the January to June 2016 period, an increase by 95% from the comparable period in 2015. Under the CARS Program, Mitsubishi Motors Philippine Corporation will invest P4.39 Billion for the full production of its Mirage/Mirage G4 Model while Toyota Motor Philippines Corporation will infuse P3.25 Billion for the production of its new Vios model. More importantly, Secretary Lopez emphasized, the CARS Program will secure for local SME parts makers a big-enough market to attain regionally-competitive economies of scale and opportunities to upgrade technology by attracting global joint-venture partners.
“Investments coming in are really targeted to help the economy grow. Manufacturing resurgence is now happening as evident in the 8.1% growth of the sector in the first quarter,” said Undersecretary and BOI Managing Head Ceferino Rodolfo. “We expect further growth of the sector in the next quarters as the agency leads in continuing the implementation of the Manufacturing Resurgence Program. We have successfully rolled out the CARS Program and unprecedented as it is, we are looking at about three more sectors to develop into a similar program. Manufacturing, by generating large numbers of decent jobs, is key to attaining the Administration’s inclusive growth agenda,” he said.
Investment commitments from domestic sources reached P156.61 Billion or 84% of the total investment approvals in January to June of this year while the remaining 16% or P29.90 Billion were generated from foreign sources. Topping the list of foreign country sources is Singapore with investments worth P9.63 Billion or 32% share to total approved foreign investments during the period. Netherlands came in second with investments amounting to P7.12 Billion (24% share), followed by Japan with P5.69 Billion (19% share), British Virgin Islands with P2.02 Billion (7% share), and Germany with P1.96 Billion (7% share) and the balance shared by other country investors.
While the National Capital Region still led in attracting investments (P37 Billion); geographic dispersion has been evident as other regions closely followed, including: Region III with P34.81 Billion, Region IVA with P28.69 Billion, Region VII with P18.43 Billion, and Region I with P14.82 Billion.
Secretary Lopez, who also serves as BOI Chair, added that the agency expects a further upsurge in investments registration in the coming months with 30 more projects in the pipeline approximately worth P63.47 Billion. “These projects, of which more than half have already been check-listed and officially accepted, will be coming mostly from sectors that are of strategic importance due to their impact on inclusive growth and on national competitiveness such as energy and power, manufacturing, and agriculture, forestry and fishing,” he said.