THE Board of Investments (BOI) had very good news last Tuesday.
Foreign Direct Investment (FDI) commitments to the Philippines for 2017 have now reached a total of P617 billion.
This is a big jump from the R442 billion in 2016, said BOI Chairman and Department of Trade and Industry Secretary Ramon M. Lopez. This is the highest in the 50-year history of the BOI.
The government had set a target of P500 billion for foreign investments under its 2017 Investments Priorities Plan which designated strategic sectors for focused development. There was also the “Build, Build, Build” infrastructure program, power development projects, and the expected rise in domestic demand. That target of P500-bilion in FDI has been surpassed by the commitments we have received.
We must, however, consider all this good news in perspective. The Philippines is way behind most of the world in attracting foreign investments. In our part of the world, Hong Kong leads with $1,891 billion, as measured in US dollars, in total FDI in that city over the years. Among our fellow Association of Southeast Asian Nations (ASEAN) members, Singapore leads with $981 billion; Thailand has $218 billion; Malaysia has $166 billion; Vietnam has $100 billion. The Philippines has had only $58 billion accumulated over the years – about P2.9 trillion.
To this total Philippine FDI, we will now add the new investment pledges of P617 billion. These new investments are going, first, to power and energy projects; second, to infrastructure projects; third, to the manufacturing sector; fourth, to real estate; and fifth, to transportation and logistics.
The new foreign investments are going into projects – first, in Region IV-A, Calabarzon; second, in Region III, Central Luzon; third, in the National Capital Region, Metro Manila; fourth, in Region I, Ilocos; and fifth, in Region 7, Central Visayas.
The new funding is going mostly into Luzon and Visayas projects where the foreign investors expect a good return on their capital. Perhaps, when the security situation in Mindanao, now under martial law, settles down after a year, that region’s rich natural resources will attract a bigger volume of foreign investments. For now, local investors and the national government with its recently approved budget will have to lead in Mindanao projects.
On the whole, we look forward to a good year for the country. Foreign investments are only a part of the developing economic picture, but they are a good indication of what is to come. They reflect worldwide confidence supportive of local initiative, all of which promise to make 2018 a very good year for the country. ###