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Approved foreign direct investments in 2023 were 3.7 times larger than the amount recorded in 2022
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More economic zones were included in the Philippine Statistics Authority quarterly tracking of pledges
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Pledges may not translate to actual inflows in the future, but they are still considered an indicator of investment sentiment
President Ferdinand Marcos, Jr’s many foreign trips last year which Malacanang said was meant to entice foreign investors bore fruit as foreign direct investments (FDIs) soared to a record high in 2023.
Approved FDI pledges last year worth P889.07 billion were 3.7 times larger than the amount recorded the previous year, according to the Philippine Statistics Authority (PSA).
In should be noted that the PSA included more economic zones in its quarterly tracking of pledges.
The P889 billion represents FDIs committed to Philippine ecozones, which entice investors with tax perks, among other incentives. And while not all pledges translate to actual inflows in the future, they are still considered a key indicator of investor sentiment.
For the fourth quarter alone, FDI approved was recorded at P394.45 billion, an increase of 127.2% from the P173.61 billion year-on-year.
A banker told local media that the high pledges indicate that the Philippines was again an attractive destination for investors.
Ruben Carlo Asuncion, chief economist at Union Bank of the Philippines, said that although it has been a difficult investing environment, “this increase in pledges shows the attractiveness of the Philippines as an investment destination due to its skilled, available, and young population.”
Even more investments can be expected in the near-term “when the cost of borrowing worldwide becomes cheaper,” Asuncion added.
Somewhat surprisingly, The Netherlands had the highest investment commitment in the last quarter of 2023, totaling P345.76 billion, representing 87.7% of the total. Traditionally, big investors usually come from the US and Japan.
The electricity, gas, steam and air-conditioning supply industries posted the highest amount of investments at P335.87 billion.
It must also be noted that the PSA’s data differs from what the Bangko Sentral ng Pilipinas considers as FDI inflows, which is done by the central bank on a net basis.
If the commitments from last year materialize, close to 30,000 new jobs can be created.
READ: Marcos’ foreign trips yield $14.2B in actual investments — DTI
