MAKATI CITY -- Following the Bangko Sentral ng Pilipinas’ (BSP) report showing significant growth of foreign direct investments (FDI) net inflows by 98.9% year-on-year in October 2021, the Board of Investments (BOI) said it remains confident in the prospect of more investments coming into the country in 2022. 

Based on the latest BSP data released this week, the FDI net inflows remained on their upward trend for the fifth consecutive month in October 2021 to US$855 million from the US$430 million net inflows in the same period in the preceding year. Particularly, the FDI net inflows for the first 10 months of 2021 increased to US$8.1 billion or 48.1% than the US$5.5 billion net inflows in January-October 2020. Further, the cumulative FDI net inflows surged “on the back” of the 78.6% increase in non-residents’ net investments in debt instruments to US$5.9 billion from US$3.3 billion in the same period in 2020.   

Evidently, the performance recorded by the BOI in 2021 confirms the latest data by the BSP on the FDIs in the Philippines. The BOI recorded a P655.4 billion worth of investment approvals from 235 projects in 2021 with an increase in foreign investments at 218% despite the setbacks brought by the persisting pandemic.  

“The data released by the BSP are consistent with the figures of the BOI, where a surge of foreign investments by 218% was recorded last year. This goes to show that the pandemic did not stop the flow of foreign investments into the country and we are looking forward to getting more in 2022,” said Trade Secretary and BOI Chairman Ramon Lopez.  

The number of foreign investments infused into the Philippine economy saw an uptick with Php151.8 billion compared to that of 2020, which was only Php47.7 billion. In addition, the greenlighted projects in 2021 is seen to generate 46,836 jobs for the Filipinos amid the present global health crisis. 

The approved investments of the BOI still hit the Php600-billion mark before the end of 2021, lower by 30-35% of its PhP905 billion target as attributed to the rise of Delta cases and extended investors timeline for finalizing studies, decisions, and registrations. While the foreign approvals have increased in 2021, the amount of registered domestic investments however decreased from Php970 billion to P503.6 billion, down 48. 1%. 

Some of the significant approved projects in 2021 include Makati City Subway project worth P81.1 billion and Calatagan Cement Plant worth P25 billion.  

Trade Undersecretary and BOI Managing Head Ceferino Rodolfo explained that the primary reason for not reaching the initially targeted investment pledges boiled down to the implementation of stricter travel protocols globally, including in the Philippines.  

“Because of the global surge in the Delta variant and now with the emergence of the Omicron variant, these resulted to global setbacks in economic recovery, which then translated to the implementation of stricter protocols in the country. We were hit hard during the second quarter and the early part of the third quarter last year,” Undersecretary Rodolfo explained. 

In 2020, the BOI approved Php1.018 trillion amount of investments. Notably, the Bulacan airport project lifted the total amount of registered investments in 2020, the Undersecretary added, explaining that approved investments could have either highs or lows in each year. 

Throughout the pandemic, the BOI focused on helping the current businesses to continue operating and expanding and it also assisted the businesses that were already registered to implement their projects. Usec. Rodolfo projected that the investment leads in 2021 may still come into fruition by the 2nd or 3rd quarter of 2022. 

Light at the end of the tunnel is still visible, as Usec. Rodolfo bared that a big telecommunication project is coming up, amounting to P155 billion and now for the approval of the Fiscal Incentives Review Board (FIRB). Some projects in the pipeline are a new domestic shipping operator; new operator of charging stations; three (3) new operators of telecommunications infrastructure; a new producer of animal feeds; and a cement manufacturer, the Undersecretary added. 

Shifting to greener and sustainable projects, renewable energy projects such as hydro and solar plants are a priority of the BOI, according to the Undersecretary. It was also noted that the upcoming projects where investments were being generated are also levelling up, such as in hyperscalers in telecommunications, e-vehicles, COVID medicines, among others. 

During the pandemic, the Undersecretary cited the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Law as a landmark legislation and a valuable tool in incentivizing the investors. 

For the country to leap a path to recovery, the BOI advocated for the passage of the amendments to the following economic measures: the Public Service Act (PSA), which was approved by the Senate on the third and final reading on December 15, 2021; the Retail Trade Liberalization Act (RTLA), which lapsed into law; and the Foreign Investment Act (FIA), which was adopted and ratified by both the Chambers of Congress. 

Treated as priority bills of President Rodrigo Duterte, the amendment to the abovementioned laws would boost foreign direct investment to more industries in the country and speed up the recovery of the pandemic-stricken Philippine economy. In particular, the proposed amendments to the FIA of 1991 will spur growth to the country’s economy and will further foster a “culture of cooperation” among Investment Promotion Agencies (IPAs), while the PSA will allow 100% foreign ownership in “telecommunications, air carriers, domestic shipping, railways and subways, and canals and irrigation sectors.” On the other hand, the amended RTLA sets the minimum paid-up capital requirement for foreign retailers at P25 million or around US$500,000, whereas, in the previous law, the minimum paid-up capital requirement for foreign retailers was US$2.5 million. 

Meanwhile, the BOI implemented various health and COVID-support activities in response to pressing needs such as its initiative in the Task Force on Oxygen Supply to achieve sustainable production and ensure availability, and prevent supply shortage for medical grade oxygen in the country. The BOI has also recently approved the project for the local production of Molnupiravir in the country which will help reduce our dependence on imported critical medicines. Other feats of the BOI were on the PPE Repurposing Manufacturing Ecosystem; local vaccine manufacturing; and COVID-proofing activities. 

Additionally, the BOI advocated for the work from home (WFH) Policy for the IT-BPM Sector resulting in the adoption of FIRB Resolution No. 19-21; lifting of locational restrictions of BPO under the SIPP; and pushed for a policy allowing the movement of Income Tax Holiday (ITH) for businesses affected by exceptional circumstances for businesses to optimize incentives availed. 

Furthermore, the BOI is zeroing in on projects that will transform the Philippine economy to become more modern such as telecommunications, roads, among others. Despite the shortfalls brought by the pandemic, the Undersecretary expressed optimism that the Philippines can still Make it Happen as it welcomes more investments flowing into the country this year.  (BOI)