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Investment pledges from foreign firms during the presidential visits over the past 16 months are now being actualized substantively and tangibly, boosting the position of the Philippines as a premier investment destination for foreign businesses in Asia, according to the Department of Trade and Industry (DTI).
Notably, the presidential visits of President Ferdinand R. Marcos Jr. have been pivotal in generating serious investment interest in the Philippines. The President visited key countries, introducing to specific investor communities his overall vision and policy direction of opening up the country to more foreign investments, including implementing game-changing legislation under his term.
As of December 2023, the Department of Trade and Industry (DTI) recorded USD 72.2 billion in investments at different stages, comprising 148 projects. Among these, 46 projects involving USD14.2 billion (20% of total pledges) have already been actualized – i.e., already operating and/or have completed the process of registering the project with DTI’s Investment Promotion Agencies or have commenced implementation (i.e., have spent financial and staff resources to undertake specific, tangible steps for implementing the project). These investments span various sectors, such as manufacturing, IT-BPM, renewable energy, infrastructure, transport and logistics, agriculture, and retail.
Among these sectors, manufacturing has the largest share in terms of the number of projects, comprising 16 projects (equivalent to 35%), followed closely by IT-BPM with 10 projects (22%) and renewable energy with 9 projects (20%).
The most significant countries as investment sources regarding the number of projects that have already been actualized are Japan with 21 projects equivalent and the U.S. with 13 projects.
Meanwhile, foreign investors are still conducting pre-implementation and planning activities in their respective countries for the remaining 102 projects involving USD 58 billion in investment pledges.
While certain investment projects seamlessly progress from commitment to operation (e.g., IT-BPM), others require a more extended implementation period of up to 7 years in the case of offshore wind and major physical infrastructure projects. The investment flows into the country in phases over the implementation period, during which the project transitions into operational status and begins generating revenues.
The duration of the implementation period depends on the sector to which a particular project belongs. Due to relatively shorter implementation periods, investment commitments from the presidential visits in the Information Technology and Business Process Management (IT-BPM) sector and in light manufacturing have mostly become operational. While the FDI values are modest, the early actualization of investment commitments in these sectors contributes to the decrease in the unemployment rate in the Philippines, given that IT-BPM and manufacturing are significant generators of direct employment.
To streamline investment processes and foster a conducive business environment, the government has implemented policy initiatives such as Executive Order 18, establishing “Green Lanes” for strategic investments. Approved by the President in February last year, green lanes aim to hasten, simplify, and automate the permit and license application processes for strategic investments in the Philippines.
The implementation of green lanes has sparked significant interest among investors eager for streamlined approval processes. As of February 8, 2024, the Board of Investments (BOI) has granted green lane certification to 41 projects, with 20 projects either having submitted commitments during the presidential visits or directly resulting from follow-through activities. While presidential visits are effective platforms for generating investment pledges, realizing projects demands relentless follow-through and strategic collaboration. As investments materialize, the Philippines will reap the long-term benefits of sustained economic growth and job creation. “Our dedication to turning investment pledges into reality is unwavering. We also leverage each presidential visit as a springboard for building up a pipeline of investment opportunities and making the Philippines an investment destination of choice,” DTI Secretary Fred Pascual asserted.
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ABOUT THE BLOGGER
Hi, I'm Ralph Gregore Masalihit!
An RFP Graduate (Registered Financial Planner Institute - Philippines).
A Personal Finance Advocate. An I.T. by Profession. An Investor. Business Minded. An Introvert. A Photography Enthusiast. A Travel and Personal Finance Blogger (Lakbay Diwa and Kuripot Pinoy).
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