MANILA, Philippines – The last time foreign direct investments (FDIs) stood at P241 billion, Fidel Ramos was president, investments were flying high and the country was being heralded among the “Tiger” economies in Asia.
The year 2011 may feel like déjà vu as annual FDIs soared 30.6% to P256.1 billion, passing even the 1996 record high, while the local stock index hit its highest high, passing the 5,000 level on intraday trading.
Soaring FDIs and hot money are often interpreted as a sign of confidence in the economy. But FDI, more than portfolio funds that are invested in the financial markets, have direct impact on job creation and feeding of the supply chains.
On Monday, March 12, the National Statistical Coordination Board (NSCB) noted that FDIs pledged in the 4th quarter are expected to generate 41,920 jobs, 61.7% higher than the 25,919 jobs expected from the same period the year before.
Manufacturing, which typically leads industries for FDI commitments, bested all other sectors, taking in 54% or P89.5 billion of investments.
Pledges for the information and communications technology sector, however, plunged 60.5% to P9.5 billion in the 4th quarter of 2011 against P24.1 billion recorded in the same quarter in 2010.
For the full year 2011, NSCB said the top sources of FDIs are the following countries:
- Japan, 30.2%
- USA, 27.5%
- Netherlands, 11.1%
Together the 3 countries pledged P176.1 billion.
In the 4th quarter of 2011, America made the most sizable investments in the Philippines, accounting for 32.2% of FDI commitments.
What this means
FDIs, which are meant to help investors abroad form a “lasting interest” in the economy, can be approved by any of 6 different agencies:
- Philippine Economic Zone Authority (PEZA)
- Board of Investments (BOI)
- Clark Development Corporation (CDC)
- Subic Bay Metropolitan Authority (SBMA)
- Authority of the Freeport Area of Bataan (AFAB)
- Board of Investments Autonomous Region of Muslim Mindanao (BOI-ARMM))
According to the NSCB’s latest report, 87.3% or P144.7 billion of total FDIs were coursed through PEZA.
About 35,228 jobs–the most number of jobs for the quarter–are expected to be generated by these PEZA-approved FDI projects. – Rappler.com