Investment commitments shrank 71 percent in the first four months of the year to P84.1 billion from P286.7 billion year-on-year, weighed down by the COVID-19 pandemic that restricted economic activities in the country.
“The downturn is expected due to the COVID-19 pandemic where economic activities and investments are disrupted due to lockdowns around the world. We have to prepare for a V-shaped recovery with a Bounce Back Plan,” said Trade Secretary and Board of Investments chairman Ramon Lopez Thursday.
“The economy demonstrated its resilience, contracting by just 0.2 percent in the first quarter of this year—a better performance even if compared with developed countries whose contractions have been from anywhere between 4 to 7 percent. The risk of global recession is real but for our part, we are making sure that this is only transitory and we are already laying the foundation for our recovery,” Lopez added.
Approved investment pledges from domestic sources dropped 68 percent to P70.7 billion from P219.7 billion a year ago, while those from foreign investors reached P13.4 billion, down 80 percent from P66.9 billion a year ago.
Investments on transportation and storage sector hit P60.2 billion, accounting for 71 percent of the total figure.
The rest went to real estate, P8.8 billion; manufacturing, P5.3 billion; power, P4.2 billion: and accommodation, P3.8 billion.
Seventy projects received fiscal incentives from the BOI and were expected to generate as much as 11,055 jobs.
France topped the list of foreign investments with P1.5 billion. Japan came in second with P790 million while Malaysia placed third with P601 million. India and the United Kingdom rounded up the top five with P325 million and P156 million, respectively.
Among the April approvals were Anflo Banana Corp.’s P616-million project covering the production of cavendish bananas in Davao Oriental, and Maclin Electronic’s P132-million project involving the production of electronic appliances such as electric fans, washing machines, spin dyers and air coolers in Rizal.
At least P1.6 billion of realized business leads are in the pipeline. These are mostly support projects for telecommunications and other infrastructure projects.
“During the past two months, the role of the BOI had shifted to providing support for firms—particularly those allowed to operate during the various phases of the quarantine period—to continue business operations and facilitate continuity in their value chain,” said BOI managing head Ceferino Rodolfo.
“While the actual approved figures are down, this is partly because there are investment projects which we have chosen to carefully re-confirm with proponents their commitment to pursue even in this environment. So far, the investors remain solidly optimistic about the medium-to-long-term prospects of the country,” he added.
He said the low investment pledges might last till 2021, although the situation could be temporary after many business owners committed to expand or create new projects in the short term.
The agency cited the business community for its quick to respond to the needs of the country in terms of re-purposing their manufacturing capabilities to produce essential goods needed in the fight against COVID 19.