Investment pledges to RP slide by a third last year

Investment pledges to the government’s two lead agencies dropped by nearly a third last year amid the deepening global economic downturn, the Trade department said on Wednesday. The Board of Investments (BoI) and the Philippine Economic Zone Authority (PEZA) fell short of their combined growth target, as investment commitments slid by 32 percent to P299.54 billion from the prior year. It was the decline in investment pledges for sites outside economic zones — those committed to BoI — that dragged down the total. Pledges to this agency were more than halved to P124.175 billion, thwarting the BoI’s goal of matching 2008’s P288.35-billion record. Investment pledges to the PEZA, in contrast, grew by 13.3 percent to P175.365 billion and exceeded the agency’s target of a tenth. Despite the poor showing, Trade Secretary Peter B. Favila hailed the 2009 investment tally as "reasonable." "Given the global economic recession in 2008 that spilled over in 2009, we managed to bring in investments at reasonable levels," he said in the statement. The investment figure was made up of 751 projects that are expected to generate 174,807 direct jobs. These will mostly go to manufacturing, utility, real estate and information technology projects, the department said. "We may also take note that a number of ASEAN member countries had experienced a deeper decline, as in the case of Malaysia," Favila said, citing a report that its investment approvals had tumbled by almost half and foreign direct investments declining by more than half. "In our case, the decline in foreign investments was registered at 30 percent," he said. In contrast, Favila said, the Philippines had posted durable investment flows during the global financial crisis. This year, the PEZA is looking at increasing investment pledges by 15 percent, while the BoI is aiming for 10-percent growth, which means it won't be able to recover from the 56.9-percent drop in its pledges last year. — Jessica Anne D. Hermosa, BusinessWorld