Department of Trade and Industry (DTI) Secretary and Board of Investments (BOI) Chairperson Ramon Lopez announced a P1.25T project approval target for the agency in 2021, following total approved investments of P1.02T last year.
“We are working hard for a V-shaped Philippine economic recovery in 2021 and are hence targeting the original 2020 pre-pandemic goal for investments,” Lopez said.
Following 2019’s record approval of P1.14T, BOI originally set a P1.25T for 2020 but has re-calibrated it to P1Tdue to the pandemic.
Towards the end of 2020, the Agency was able to achieve this target with the endorsement of the Department of Energy (DOE) of two strategic power projects and the approval of a critical water supply and distribution project which is especially crucial in ensuring water security and contributing to flood-control.
Approval for 2020 reached P1.02T, which while 11% lower than 2019 actual approvals, is still the 2nd highest in BOI’s 53-year history.
“We thank the business community for, despite the pandemic, continuing to invest in mid-to-long-term strategic projects.”
“We thank the business community for, despite the pandemic, continuing to invest in mid-to-long-term strategic projects that will significantly contribute towards a more modern and efficient, industrial Philippines,” the trade chief added.
Moreover, the trade head projected that “Moving forward to 2021, we expect that investments in these types of projects will intensify particularly in infrastructure (road, ports, and telecoms), water and power.”
The Philippines is one of the countries to buck a severe contraction of global Foreign Direct Investment (FDI) inflows which declined by 42%. In contrast, based on a report by the United Nations Conference on Trade and Development (UNCTAD), FDI inflows to the Philippines increased by 29%.
On the other hand, Trade Undersecretary and BOI Managing Head Ceferino Rodolfo highlighted the role of investment facilitation to meet the Agency’s target particularly due to the effects of the pandemic.
“BOI is committed to extending support so existing businesses stay afloat and operating.”
“BOI, working with other government agencies, is committed to extending support so existing businesses stay afloat and operating, and guiding new investors to facilitate their entry,” Rodolfo stressed.
He cited the Power sector as an example: after enactment by Congress of the Energy Virtual One-Stop Shop (EVOSS Act), the Department of Energy (DOE) leads a whole-of-government approach in streamlining the processing of power projects with the creation and establishment of an online platform where prospective developers can apply, monitor, and receive all the needed permits and applications, submit all documentary requirements, and even pay for fees.
Rodolfo added that partnership with DOE goes beyond investment facilitation but also covers support for important initiatives that not only develop greater power supply but also promotes more sustainable energy sources.
In addition to infrastructure, other sectors that contributed to meeting the 2020 recalibrated target include power (electricity) which was able to commit P199.2B worth of projects and the transportation and storage sector mounted a remarkable performance with P161.6B or a 382 increase from just P33.5B in 2019 due to the strong demand for cargoes and deliveries and the rise of online transactions.
The Water Supply and Sewerage sector surged with P27B (from a mere P845M in 2019). Tourism got a boost with accommodation and food projects totaling P14.4B, a 46% jump from P9.9B a year before. Real estate activities even improved with P32.5B, a 6% improvement from P30.6B, and last but not the least, the agriculture sector rose nearly 13% with P3.8B from P3.4B the previous year.
He, however, emphasized that “While there is a constant flow of investment leads and applications, the BOI as a prudent administrator of incentives puts primacy in a rigorous assessment of these projects. Government agencies however have been putting extraordinary efforts to have efficient coordination in removing obstacles to business endeavors, particularly the strategic and critical projects.”
For the whole of 2020, a total of 311 projects got the nod. All told, when these projects go fully operational, they will generate 55,124 jobs.
Domestic investments accounted for P968.45B or 95.3% of the total approved investments figure while foreign investments reached P47.7B (4.7%).
Among foreign investors, the United States was the pace-setter with P11.2B, up 303% from P2.8B in 2019. The Netherlands finished second with P2.7B followed by Singapore with P2.2B. France and Japan completed the five biggest investors with P1.6B and P1.2B, respectively.
For December, among the project approvals were the Excellent Energy Resources, Inc.’s two power projects in Batangas worth P41.7B and P36.6B, respectively, involving phase one and two of 850 megawatts (MW) each; WAWAJVCO Inc.’s water supply project in Wawa Dam worth P24.5B; H&WB Asia Pacific (PTE LTD) Corp.’s P2.8B 96.35 MW Pinugay Solar Power Plant; and the three Battery Energy Storage System (BESS) Component of Integrated Renewable Power Facility Hubs (R-HUB) projects of Universal Power Solutions, Inc. worth P2.4B each across different locations.
Central Luzon (Region III) topped all regions in 2020 with P576.1B on the strength of the mammoth Bulacan airport project. Calabarzon (Region IV-A) placed second with P184.1B. The National Capital Region (NCR) was third with P151.3B. Northern Mindanao (Region X) with P31.7B and Ilocos Region (Region I) with P13.8B rounded out the top five host regions.
“We welcome the passage in the Congress bicameral committee of the Corporate Recovery and Tax Reform (CREATE), which will be a game-changer. It will definitely remove uncertainties in the incentives regime and give a big boost in attracting investments for the country. We thank the Senate and House of Representatives for making this possible,” Lopez concluded.