BOI Hits P617B in Investment Approvals for 2017, Highest in 50-Year History

Trade Secretary Ramon Lopez, Chairman of the Philippine Board of Investments (BOI), announced the unprecedented P616.7 billion in investments approvals, the highest in the agency’s 50-year history. The figure is up 39.5 percent from the P442B recorded in 2016; and 23.5 percent over the P500 billion targeted at the start of 2017.

The BOI’s previous highest approved investment level was in 1997, recording P570.1 billion mainly from investments due to the privatization and deregulation of public utilities (water supply and telecommunications).

Image Source: BOI Infocomms DIV

The record-breaking figure comprised 426 projects, up 13 percent from 2016’s 378 projects. All told, these projects will generate around 76,065 jobs upon full operations, up 12.5 percent from 2016’s 67,634 jobs.

“This validates business confidence in President Rodrigo Duterte’s economic programs to ensure inclusive growth and shared prosperity for the country. The influx of investments is definitely steamrolling, as we are expecting sustained higher investments for the next five years,” Lopez said.

“The momentum of our 6.9 percent GDP growth in the third quarter and 6.7 percent overall growth for the first nine months have definitely carried over in the fourth quarter, investment-wise and further boosted with the frenzied economic activity given the holiday season,” he explained.

At the start of the year, BOI targeted an ambitious investment level of P500 billion by the end of 2017, or “P500 billion for BOI@50,” to mark the agency’s 50th founding anniversary.

“We were happy then to just reach our P500 billion target. But to blitz past the P600 billion mark is something we are definitely ecstatic as this only proves the continuing confidence of the investors in making their business grow in the Philippines,” added Lopez.

According to Trade Undersecretary and BOI Managing Head Ceferino Rodolfo, the surge in investments for the year are mainly due to the designation of focused strategic sectors under the 2017 Investments Priorities Plan (IPP), infrastructure, and power projects; and the strong growth of domestic demand.

With manufacturing as listed in the 2017 IPP, investments were noted in key manufacturing industries such as cement, sugar, and petrochem.

Investments in the manufacturing sector increased more than three-folds to P96 billion in 2017 from only P27 billion in 2015. The figure is also 95 percent higher than the P49.259 billion reported in 2016.

The manufacturing sector is the third top performing sector for 2017. Power and energy projects remain as the top performing sectors with P268.168 billion in approved investments, followed by infrastructure and PPP projects with P127.658 billion. Real estate and mass housing projects ranked as fourth top performing industry with P86 billion while transportation and logistics came in fifth with P15.909 billion.

“The increase in infrastructure projects this year supports the BOI’s push for the growth in economic activities outside Metro Manila and the ‘Build, Build, Build’ or the massive infrastructure program of the administration,” Rodolfo said.

“While BOI incentives are directed for strategic domestic projects, a number of foreign investment projects also registered with BOI,” he said.

Japan is the number one source of foreign investment projects for the year with P8.864 billion, mainly in green ship recycling, chemicals, glass manufacturing, among others. This was followed by Singapore with P3.497 billion, Australia with P1.996 billion, British Virgin Islands with P1.084 billion – all in renewable energy, and The Netherlands with P1.074 billion (manufacturing).

Following the deliberate effort to disperse activities outside Metro Manila, a decrease by 53 percent in investments approval were noted in National Capital Region (NCR). Meanwhile, a 65 percent increase in investments were recorded in non-NCR areas.

Region IVA (CALABARZON) topped as the number one destination for BOI-registered investments with P294.6 billion or 48 percent share of the total approved investments. Region III (Central Luzon) followed with P123.3 billion while investments in NCR came only as third with P44.3 billion. Substantial investments were noted in Region 1 (Ilocos Region) with P39.6 billion and Region 7 (Central Visayas) with P35.6 billion.

Significant increases in investments were noted in the regions. For example, investments in Region II (Cagayan Valley) reached P14.011 billion or a P172 percent increase from only P5.151 billion recorded in 2016. (BOI Infocomms)