Q3 foreign pledges drop from year-ago levels

INVESTMENT PLEDGES made by foreign companies in the third quarter rebounded from a nine-quarter low in the second quarter, but remained significantly lower compared with the same period last year, data from the Philippine Statistics Authority (PSA) showed.

Approved foreign investment pledges amounted to P31.03 billion in the third quarter, double the P15.46 billion in the previous quarter, but 83% lower than the P182.44 billion in the same three months in 2019. This represents the amount of foreign-led projects given the go signal by the country’s seven investment promotion agencies (IPAs).

The year-on-year drop in the third quarter was the biggest since the 84.4% slump in the third quarter of 2009.

For the first nine months of 2020, the approved pledges reached P75.64 billion, 72.8% lower than the P278 billion during the same period a year ago.

Meanwhile, combined pledges of foreigners and Filipinos approved by IPAs totaled P176.55 billion, 65.8% less than the P515.71 billion a year ago. Domestic pledges reached P145.52 billion in the third quarter, accounting for 82.4% of the total.

Should these commitments materialize, foreign and local investments pledged in the third quarter were estimated to generate 32,100 jobs, down 36.6% from the projected additional employment of 50,628 a year ago.

Only nine of the 17 regions recorded foreign pledges in the third quarter. Of these, Soccsksargen got the highest share with 31.3% or P9.73 billion, followed by the National Capital Region’s 29.3% (P9.1 billion), Calabarzon’s 16.8% (P5.22 billion), and Central Luzon’s 11.2% (P3.48 billion).

Among the seven IPAs monitored by the PSA, the Philippine Economic Zone Authority and the Board of Investments got the bulk of foreign pledges with 65.3% and 34.3% shares of the total, respectively, or P20.28 billion and P10.63 billion.

Mainland China was the biggest source of investment commitments during the period with P9.58 billion, around eight times more than the P1.24 billion in the third quarter of 2019 and accounting for 30.9% of the total. It was followed by the United States with P7.16 billion (23.1% share) and the United Kingdom with P4.76 billion (15.3% share).