Foreign Direct Investments in the Philippines · About this report This report is the 73rd of a series on quarterly statistics on foreign investments (FI) ... (BSP) recorded net inflows

Approved Foreign Investments, Q3 2015

1

Inside

Part I - Analysis A. Approved foreign

investments…………………….... 4 to 12 B. Approved investments of foreign and

Filipino nationals……………….. 12 to 20 C. Approved investments in the

Information and Communications Technology (ICT) Industry………………..…….….. 20 to 22

D. Actual foreign direct investments

in the Balance of Payments…… 23 to 24 Part II – Statistical Tables Annexes

Approved Foreign Investments in the Philippines

Third Quarter 2015

Summary

Total approved foreign investments (FI)1, Q3 and January to September 2015

Total foreign investments (FI) approved in the third quarter of 2015 by the seven investment promotion agencies (IPAs), namely: Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA) as well as the Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM), and Cagayan Economic Zone Authority (CEZA) amounted to PhP 48.6 billion, higher by 165.0 percent from PhP 18.3 billion recorded in the same period last year. Meanwhile, total approved FI for the first nine months of the year reached PhP 106.6 billion, an increase of 16.2 percent from PhP 91.8 billion in the previous year. The top three prospective investing countries for the third quarter of 2015 include the Netherlands, Japan and South Korea. The Netherlands pledged PhP 27.7 billion or 56.9 percent share during the quarter while Japan and South Korea committed PhP 4.1 billion and PhP 3.6 billion, or 8.4 percent and 7.5 percent of the total approved FI, respectively. For the period January to September of 2015, the Netherlands also ranked first, with investment commitments of PhP 45.7 billion or 42.9 percent. Japan with investments reaching PhP 15.3 billion and Singapore with investments amounting to PhP12.2 billion, ranked second and third, respectively. Electricity, gas, steam and air conditioning supply received the largest amount for approved foreign investments in the third quarter of 2015, with PhP 27.8 billion or 57.0 percent share. Manufacturing came in second with investment pledges valued at PhP 7.9 billion or 16.2 percent, followed by administrative and support service activities at PhP 3.6 billion or 7.4 percent share. In the first nine months of 2015, manufacturing garnered the biggest commitments at PhP 38.8 billion, accounting for 36.4 percent. This is followed by electricity, gas, steam and air conditioning supply at PhP 28.4 billion or 26.6 percent and administrative and support service activities at PhP 8.6 billion or 8.1 percent.

About this report This report is the 73

rd of a series on quarterly statistics on foreign investments (FI) in the Philippines,

integrating the quarterly statistical reports on FI submitted by the government’s investments promotion, administration and regulation agencies. It provides an analysis of the:

(a) Foreign investments (FI) and investments by Filipinos approved by the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA), Authority of the Freeport Area of Bataan (AFAB), BOI-Autonomous Region of Muslim Mindanao (BOI-ARMM), and Cagayan Economic Zone Authority (CEZA). Approved foreign investments represent investment commitments or pledges by foreigners regardless of the percentage of ownership of the ordinary shares, which may be realized in the near future.

(b) Foreign direct investments (FDI) in the Balance of Payments (BOP) as compiled by the Bangko Sentral ng Pilipinas (BSP). FDI refers to actual foreign direct investments in the BOP, with the foreign investors owning 10 percent or more of the ordinary shares or voting power or the equivalent.

Notes: (a) Starting with Q3 2013 Report, foreign investments approved and registered by the investment promotion agencies (IPAs) is termed “approved foreign investments,” replacing the term “approved foreign direct investments” used in the previous reports. This is to distinguish clearly the approved foreign investments which are only commitments or pledges from the foreign direct investments (FDI) which are actual investments being compiled by the BSP. (b) Revisions in the previous quarters’ data are based on the updates provided by the investment promotion agencies. Annex A presents the technical notes on the data and compilation methodology while Annex B gives a brief background on the Foreign Investment Information System (FIIS) that generates the FI statistics presented in this report.

1 Approved FI represents the amount of proposed contribution or share of foreigners to various projects in the country as

approved and registered by the IPAs. This consists of equity, loans and reinvested earnings. (See Annex A – Technical Notes)


2

In terms of location, bulk of the approved foreign investments in the third quarter of 2015 would also be intended to finance projects in Region IVA – CALABARZON, amounting to PhP 32.2 billion or 66.3 percent. The next highest investments would be in Region III – Central Luzon at PhP 7.6 billion or 15.7 percent, followed by the National Capital Region (NCR) at PhP 4.9 billion or 10.1 percent. For the period January to September of 2015, majority of the approved foreign investments would also be in Region IVA, valued at PhP 63.6 billion or 59.7 percent share. This is followed by Region III with pledges amounting to PhP 15.0 billion or 14.0 percent and NCR at PhP 12.8 billion or 12.0 percent. Foreign direct investments (FDI) 2 in the Balance of Payments, Q3 and January to September 2015 Foreign direct investments (FDI) in the Balance of Payments (BOP) as compiled by the Bangko Sentral ng Pilipinas (BSP) recorded net inflows of US$ 2.5 billion in the third quarter of 2015. The amount is 74.9 percent higher than US$ 1.4 billion in the same period last year. Meanwhile, net FDI inflows for January to September of 2015 amounted to US$ 4.5 billion, lower by 5.5 percent from US$ 4.8 billion during the same period in 2014. In peso terms, FDI in the BOP for third quarter of 2015 posted a net inflow of PhP 110.5 billion, up by 76.5 percent from PhP 62.6 billion in the same period last year. For the first nine months of the year, FDI in the BOP recorded a net inflow of PhP 201.4 billion, posting 5.4 percent decline from a net inflow of PhP 212.9 billion in the same period in 2014.

Approved investments of foreign and Filipino nationals, Q3 and January to September 2015

Approved investments of foreign and Filipino nationals reached PhP 168.2 billion in the third quarter of 2015, up by 5.4 percent from last year’s PhP 159.6 billion. Filipino nationals continued to dominate investments approved during the quarter, sharing 71.1 percent or PhP 119.6 billion worth of pledges. Among the industries, electricity, gas, steam and air conditioning supply would receive the highest investments at PhP 83.4 billion or 49.6 percent of the total approved investments.

For January to September of 2015, the total approved investments of foreign and Filipino nationals amounted to PhP 354.6 billion, 32.4 percent lower than PhP 524.6 billion committed a year ago. The highest investments would go to real estate activities at PhP 104.4 billion or 29.4 percent of the total approved investments.

Projected employment from approved investments of foreign and Filipino nationals, Q3 and January to September 2015

Total projects of foreign and Filipino investors approved by the seven IPAs for the third quarter of 2015 are expected to generate 48,776 jobs, lower by 10.7 percent from last year’s projected employment of 54,606 in the same period. Out of the total anticipated jobs for the period, 78.1 percent would come from projects with foreign interest. Among the industries, manufacturing is expected to have the most number of jobs to be generated at 15,330.

For January to September of the year, projected employment from approved investments reached 130,169 jobs, down by 41.3 percent from the 221,930 jobs expected in the same period a year ago. The most number of jobs expected to be generated would be for the manufacturing sector at 37,643.


3

Approved investments of foreign and Filipino nationals in Information and Communications Technology (ICT), Q3 and January to September 2015

Investments in information and communications technology (ICT) proposed by foreign and Filipino nationals in Q3 2015 went up by 4.6 percent to PhP 4.9 billion, from PhP 4.7 billion committed in the third quarter of 2014. Share of the projects in ICT stood at 2.9 percent of the total approved investments during the quarter. Foreign nationals remained as the major source of investment pledges in ICT, committing PhP 4.3 billion worth of investments or a share of 88.1 percent.

Proposed investments in ICT for the first nine months of the year totaled PhP 18.3 billion, an increase by 31.9 percent from PhP 13.9 billion committed in the January to September of 2014.


4

Part I – ANALYSIS

A. Approved foreign investments (FI)

A.1 Total approved FI

A.1.1 Third quarter 2015

FI applications approved in the third quarter of 2015 by BOI, CDC, PEZA, SBMA, AFAB, BOI-ARMM, and CEZA amounted to PhP 48.6 billion, up by 165.0 percent from PhP 18.3 billion recorded in the same period last year.

Figure 1a Total Approved Foreign Investments

Third Quarter, 2014 and 2015

Sources of data: AFAB, BOI, BOI-ARMM, CDC, CEZA, PEZA, SBMA

Among the IPAs, BOI and BOI-ARMM registered the fastest increase in Q3 2015, both growing by 14 folds to PhP 28.5 billion and PhP 3.2 billion, respectively. BOI accounted for more than half, or 58.7 percent, of the FI approvals. Likewise, approved investments from CDC and SBMA both tripled to PhP 2.3 billion and PhP 394.6 million, respectively. Pledges from AFAB increased by 26.1 percent while pledges from CEZA grew by 10.4 percent. On the other hand, FI approvals from PEZA, which accounts for 28.6 percent of the total approvals, went down by 8.7 percent compared to the previous year (Table A and Part II – Table 1b).

Table A Total Approved FI by Investment Promotion Agency

(in million pesos) Third Quarter, 2014 and 2015


18.3

48.6

-

10.0

20.0

30.0

40.0

50.0

60.0

Q3 2014 Q3 2015

in b

illio

n p

es

os

Q3 2014 Q3 2015

AFAB 155.62 196.3 0.4 26.1

BOI 1,933.4 28,509.9 58.7 1374.6

BOI ARMM 228.00 3,218.7 6.6 1311.7

CDC 596.9 2,265.0 4.7 279.5

CEZA 82.0 90.5 0.2 10.4

PEZA 15,210.1 13,894.3 28.6 (8.7)

SBMA 124.5 394.6 0.8 217.0

Total 18,330.5 48,569.4 100.0 165.0

AgencyGrowth Rate

Q3 2014 - Q3 2015

Approved FI Percent to Total

Q3 2015


5

A.1.2 January to September 2015 Total approved FI for the first nine months of the year reached PhP 106.6 billion, up by 16.2 percent from last year’s PhP 91.8 billion. Almost half of total FI applications, at 49.0 percent, was coursed through PEZA with pledges amounting to PhP 52.3 billion. BOI accounted for the second largest share of FI approvals with 39.2 percent or PhP 41.8 billion while CDC accounted for 7.2 percent or PhP 7.7 billion. The other IPAs contributed 4.6 percent of the total FI from January to September of 2015.

Figure 1b Total Approved Foreign Investments January to September, 2014 and 2015


Investment pledges from BOI-ARMM increased by five folds in the first nine months of 2015. Commitments from both BOI and CEZA tripled from their year-ago levels while commitments from AFAB grew by 29.9 percent. One the other hand, approved FI from SBMA, CDC, PEZA declined by 92.6 percent, 10.7 percent, and 8.7 percent, respectively (Table B and Part II – Table 1c).

Table B Total Approved FI by Investment Promotion Agency

(in million pesos) January to September, 2014 and 2015


91.8

106.6

-

20.0

40.0

60.0

80.0

100.0

120.0

Jan to Sept 2014 Jan to Sept 2015

in b

illio

n p

es

os


AFAB 230.2 299.1 0.3 29.9

BOI 13,395.9 41,796.5 39.2 212.0

BOI ARMM 579.6 3,218.7 3.0 455.4

CDC 8,537.6 7,621.8 7.2 (10.7)

CEZA 133.2 524.3 0.5 293.7

PEZA 57,267.5 52,278.3 49.0 (8.7)

SBMA 11,630.4 857.3 0.8 (92.6)

Total 91,774.4 106,596.1 100.0 16.2

Percent to Total

Jan to Sep 2015

Growth Rate

Jan to Sept 2014- Jan to Sept

2015

Approved FIAgency


6

Figure 2 below shows the series of quarterly approved FI from Q1 1996 to Q3 2015.

Figure 2 Total Approved Foreign Investments (in billion pesos)

First Quarter 1996 to Third Quarter 2015


A.2 Top prospective investing countries


The Netherlands led the list of top countries as it intended to pour in PhP 27.7 billion worth of investments, accounting for 56.9 percent of the total FI during the third quarter of 2015. Majority of the investments are intended to finance projects in electricity, gas, steam, and air conditioning supply and manufacturing. Joining the Netherlands as top sources of FI are Japan, with PhP 4.1 billion investment pledges or a share of 8.4 percent and South Korea, cutting in 7.5 percent or PhP 3.7 billion. Investments pledged from the Japan are mostly intended to finance projects in the manufacturing while FI from South Korea would fund projects in accommodation and food service activities (Figure 3a and Part II - Table 2a).


7

Figure 3a Total Approved FI by Country of Investor

Third Quarter 2015

.

Sources of data: AFAB, BOI, BOI-ARMM, CDC, CEZA, PEZA, SBMA A.2.2 January to September 2015

In the first nine months of 2015, the Netherlands continued to top the list of investing countries, committing PhP 45.7 billion or 42.9 percent of the total FI applications, followed by Japan, sharing PhP 15.3 billion or 14.3 percent, and Singapore, cutting in PhP 12.2 billion or 11.4 percent share. Investments from the Netherlands were mainly intended to fund projects in electricity, gas, steam, and air conditioning supply while most of the investments from Japan and Singapore would be in manufacturing. Investment pledges from the Netherlands registered an increase of 365.4 percent while FI applications from Japan grew by 3.3 percent. However, commitments from Singapore declined by 5.8 percent (Figure 3b and Part II – Table 2b).

Figure 3b Total Approved FI by Country of Investor

January to September 2015


Netherlands56.9%

Japan8.4%

South Korea7.5%

British Virgin Islands

4.9%Singapore4.5%

USA3.4%

Cayman Islands3.3%

Germany2.6%

Others8.5%

Netherlands42.9%

Japan14.3%

Singapore11.4%

South Korea9.8%USA

4.9%

British Virgin Islands

4.7%

UK1.5%

Cayman Islands1.5%

Others8.8%


8

A.3 Top industries for approved foreign investments


More than half, or 57.0 percent, of the approved foreign investments in third quarter of 2015 were intended to fund projects in the Electricity, gas, steam, and air conditioning supply industry. Investments in the sector grew by 27 folds to PhP 27.7 billion from PhP 1.0 billion in the same period last year. Projects in Manufacturing would receive the second largest amount of foreign investments at PhP 7.9 billion with a share of 16.2 percent. The amount is 10.7 percent lower than PhP 8.8 billion committed to the industry in Q3 2014. Trailing far behind is administrative and support service activities, with investments valued at PhP 3.6 billion or 7.4 percent (Table C and Part II – Table 3a).

Table C Total Approved FI by Industry

3 (in million pesos)



3 Industry classification is based on the 2009 Philippine Standard Industrial Classification (PSIC).

Industry

A. Agriculture, forestry and fishing 228.0 2,968.0 6.1 1,201.8

B. Mining and quarrying - - - -

C. Manufacturing 8,791.9 7,855.4 16.2 (10.7)

D. Electricity, gas, steam and air

conditioning supply

1,020.9 27,687.0 57.0 2,612.1

E. Water supply; sewerage, waste

management and remediation

activities

- 60.5 0.1 -

F. Construction 38.1 335.7 0.69 781.3

G. Wholesale and retail trade;

repair of motor vehicles and

motorcycles

125.6 1,070.3 2.2 752.4

H. Transportation and storage 174.8 331.6 0.7 89.7

I. Accommodation and food service

activities

0.5 15.5 0.0 3,073.8

J. Information and communication 1,459.1 663.1 1.4 (54.6)

K. Financial and insurance activities - 37.6 0.1 -

L. Real estate activities 2,437.0 2,653.7 5.5 8.9

M. Professional, scientific and

technical activities

32.3 19.6 0.0 (39.2)

N. Administrative and support

service activities

3,816.6 3,577.0 7.4 (6.3)

O. Public administration and

defense; compulsory social security

- - 0.0 -

P. Education 43.6 - - -

Q. Human health and social work

activities

143.0 3.8 0.0 (97.3)

R. Arts, entertainment and

recreation

- 1,200.0 2.5 -

S. Other service activities 19.2 90.5 0.2 371.0

Total 18,330.5 48,569.4 100.0 165.0

Growth Rate

Q3 2014 -

Q3 2015

Approved FI

Q3 2014 Q3 2015

Percent to

Total Q3 2015


9

A.3.2 January to September 2015 Majority of the foreign investment commitments from January to September of 2015 were intended to finance projects in the manufacturing industry as it stands to receive PhP 38.8.billion or 36.4 percent of the total approved FI. Pledges in the said industry, however, declined by 29.6 percent from PhP 55.1 billion in the same period last year. Electricity, gas, steam and air conditioning supply came in second with investment commitments valued at PhP 28.4 billion or 26.6 percent, followed by administrative and support service activities at PhP 8.6 billion or 8.1 percent share. Proposed investments in electricity, gas, steam, and air conditioning supply grew by around eight folds during the period while FI for administrative and support service activities declined by 21.1 percent (Table D and Part II – Table 3b).

Table D

Total Approved FI by Industry (in million pesos) January to September, 2014 and 2015


Industry

A. Agriculture, forestry and fishing 412.3 8,114.3 7.6 1,868.1

B. Mining and quarrying - - - -

C. Manufacturing 55,059.2 38,779.3 36.4 (29.6)

D. Electricity, gas, steam and air 3,372.1 28,397.4 26.6 742.1



activities

10.2 60.5 0.1 -

F. Construction 146.4 2,946.1 2.8 1,912.0



motorcycles

507.5 1,378.1 1.3 171.6

H. Transportation and storage 1,738.7 1,309.6 1.2 (24.7)


activities

5,465.5 4,471.1 4.2 (18.2)

J. Information and communication 2,323.0 1,802.7 1.7 (22.4)

K. Financial and insurance activities 20.1 159.6 0.1 692.6

L. Real estate activities 11,459.7 7,047.1 6.6 (38.5)



64.8 1,438.3 1.3 2,119.5


service activities

10,936.7 8,623.6 8.1 (21.1)



47.2 - - -

P. Education 46.3 - - -


activities

144.6 3.8 0.0 (97.4)


recreation

0.7 1,522.6 1.4 202,947.5

S. Other service activities 19.2 542.0 0.5 2,719.36

Total 91,774.4 106,596.1 100.0 16.2

2015

Percent to Total

Jan to Sept

2015

Growth Rate

Jan to Sept 2014 -

Jan to Sept 2015

January to September

2014


10

A.4. Total approved FI by region A.4.1 Third Quarter 2015 Bulk of the approved foreign investments in the third quarter of 2015 would be intended to finance projects located in Region IVA - CALABARZON. FI pledges that would fund projects in the said region amounts to PhP 32.2 billion or 66.3 percent of the total FI. Foreign investments in Region IVA grew by 276.1 percent compared to same period last year at PhP 8.6 billion. The regions with the second and third largest amount of investments for Q3 2015 are Region III – Central Luzon with PhP 7.6 billion or 15.7 percent and the National Capital Region (NCR) with PhP 4.9 billion or 10.1 percent (Table E and Part II – Table 4a). Majority of the investments in Region IVA are intended for projects in manufacturing and electricity, gas, steam and air conditioning supply. For Region III, the ventures would also be mostly in manufacturing while for NCR, most of the prospective projects would be in administrative and support service activities.

Figure 4a Total Approved FI by Region (in million pesos)

Q3 2015

Sources of data: AFAB, BOI, BOI-ARMM, CDC, CEZA, PEZA, SBMA A.4.2 January to September 2015 Region IVA – CALABARZON is set to receive more than half (59.7 percent) of the foreign investment commitments in the January to September of 2015, as FI in the region reached PhP 63.6 billion. Investment commitments intended for Region IVA, grew by 53.6 percent in the first nine months of the year. The second largest amount of FI during the period is intended for Region III – Central Luzon, accounting for 14.0 percent or PhP 15.0 billion. Meanwhile, National Capital Region (NCR) posted the third largest share of FI at PhP12.8 billion, 12.0 percent of the total approved investments. However, FI approvals for Region III and NCR both exhibited declines at 30.8 percent and 34.5 percent, respectively, compared to the previous year (Table F and Part II – Table 4b).


11

Majority of the investments in Region IVA and Region III are intended for projects in manufacturing. For NCR, the ventures would be mostly in administrative and support service activities.

Figure 4b

Total Approved FI by Region (in million pesos) January to September 2015

Sources of data: AFAB, BOI, BOI-ARMM, CDC, CEZA, PEZA, SBMA A.5 Projected employment from approved FI A.5.1 Third Quarter 2015 FI projects approved by the seven IPAs in the third quarter of 2015 are expected to generate 36,086 jobs, 6.2 percent lower than 40,588 prospective jobs in the same period last year (Part II – Table 5a). Foreign investments coursed through PEZA are expected to generate the most number of jobs at 24,519 accounting for 64.4 percent of the total projected employment for the quarter. BOI-approved FI projects accounted for 5,616 jobs or 14.7 percent while projects approved by BOI-ARMM accounted for 3,945 jobs or 10.4 percent share. The other IPAs had minimal share of 10.5 percent in terms of job generation. For the third quarter of 2015, all the IPAs registered an increase in the number of expected jobs with the exception of PEZA. Projected employment from PEZA-approved projects decreased by 22.8 percent in Q3 2015. Expected jobs from FI approved by BOI-ARMM grew the fastest among the IPAs, at 355.0 percent, followed by CEZA and SBMA with projected employment growing by 77.4 percent and 63.0 percent, respectively. Likewise, projected employment from AFAB, BOI, and CDC grew by 45.2 percent, 25.4 percent, and 3.9 percent, respectively. The industries which are expected to generate the most number of jobs are manufacturing at 12,791, administrative and support service activities at 11,485, and information and communication at 4,935 jobs.


12

A.4.2 January to September 2015 Projected employment from approved FI during the first nine months of 2015 stood at 87,887 jobs, less than half of the 188,837 jobs expected to be generated from the FI investments committed in the same period last year. FI projects approved by PEZA are expected to generate the most number of jobs at 63,187 or 71.9 percent of the total projected employment, followed by BOI with 11,682 jobs or 13.3 percent and CDC with 6,861 jobs or 7.8 percent (Part II – Table 5b). For the period January to September 2015, only BOI-ARMM and CEZA registered an increase in projected employment, at 121.0 percent and 96.6 percent, or 3,945 jobs and 745 jobs, respectively. Meanwhile, CDC registered the largest drop in prospective jobs at 91.5 percent. B. Approved investments of foreign and Filipino nationals B.1 Total approved investments of foreign and Filipino nationals B.1.1 Third quarter 2015

Approved investments of Filipino and foreign nationals increased by 5.4 percent to PhP 168.2 billion, from PhP 159.6 billion registered in the third quarter of 2014. Filipino nationals accounted for majority of the investments approved during the quarter, supplying 71.1 percent or PhP 119.6 billion. However, this is lower by 15.3 percent compared with the pledges placed a year ago (Figure 5a and Part II - Table 7a). The bulk of the investment commitments of foreign and Filipino nationals for the quarter were coursed through the BOI and PEZA with a combined share of 92.0 percent. Approved investments coursed through the BOI, which accounts for 59.7 percent of the total investments in the third quarter, amounted to PhP 100.4 billion, 10.9 percent lower than PhP 112.6 billion approved a year ago. Investment pledges coursed through PEZA, meanwhile, grew by 31.6 percent to PhP 54.2 billion from PhP 41.2 billion in the same period last year (Part II - Table 6a).

Figure 5a Total Approved Investments of Foreign and Filipino Nationals

Q3 2014 and Q3 2015


B.1.2 January to September 2015

Investment commitments from both foreign and Filipino nationals amounted to PhP 354.6 billion during the first nine months of 2015, a decline of 32.4 percent from PhP 524.8 billion in

18.3 48.6

141.2 119.6

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

Q3 2014 Q3 2015

in b

illi

on

pe

so

s

Filipino Foreign


13

the same period in 2014. Of the total amount for the period, 69.9 percent of the approved investments came from Filipino investors with PhP 248.0 billion worth of pledges (Figure 5b and Part II – Table 6b). Investment pledges coursed through BOI from January to September 2015 accounted for 54.3 percent of the total investments in the amount of PhP 192.4 billion. Investment commitments through PEZA, with 37.5 percent share totaled PhP 133.1 billion while investments approved by CDC accounted for 2.9 percent or PhP 10.2 billion. The other IPAs had collective pledges of PhP 18.9 billion or 5.3 percent of the total investments for the semester. Share of investments of Filipino nationals to the total approved investments was 69.9 percent while share of foreign nationals was 30.1 percent (Part II – Table 7b).

Figure 5b Total Approved Investments of Foreign and Filipino Nationals January to September 2014 and January to September 2015


B.2 Total approved investments of foreign and Filipino nationals by industry

B.2.1 Third quarter 2015 Electricity, gas, steam and air conditioning supply topped the list of industries during the third quarter of 2015 as it stands to receive PhP 83.4 billion or 49.6 percent of the total investment pledges of foreign and Filipino nationals (Figure 6a and Part II - Tables 3a and 8a). Investments in real estate activities ranked second as it accounted for 33.0 percent share or PhP 55.6 billion, followed by manufacturing, receiving 7.4 percent or PhP 12.5 billion (Figure 6a and Part II – Table 8a).

91.8

106.6

433.0

248.0

-

100.0

200.0

300.0

400.0

500.0

600.0

Jan toSept 2014

Jan toSept 2015

in b

illi

on

pe

so

s

Filipino Foreign


14

Figure 6a Total Approved Investments of Foreign and Filipino Nationals, by Industry

Q3 2015


B.2.2 January to September 2015 Topping the list of recipients of investment intentions from both foreign and Filipino nationals during the first nine months of 2015 are real estate activities in the amount of PhP 104.4 billion or 29.4 percent of total investments. Electricity, gas, steam, and air conditioning supply came in second at PhP 103.9 billion or 29.3 percent share, followed by manufacturing at PhP 60.5 billion or 17.1 percent. Potential investments in real estate increased by 5.6 percent, while investments in both electricity, gas, steam, and air conditioning supply and manufacturing declined by 47.7 percent and 50.7 percent, respectively (Figure 6b and Part II – Table 8b).


15

Figure 6b Total Approved Investments of Foreign and Filipino Nationals, by Industry


B.3. Total approved investments of foreign and Filipino Nationals by region B.3.1 Third quarter 2015 Bulk of the approved investments from foreign and Filipino nationals in the third quarter of 2015 would be intended to finance projects located in Region IVA - CALABARZON. Total investment pledges for the said region amounts to PhP 69.2 billion, or 41.1 percent of the total FI. Foreign investments in Region IVA increased by around three folds compared to same period last year at PhP 20.8 billion. The regions with the second and third largest amount of investments for Q3 2015 were the National Capital Region (NCR) with PhP 37.2 billion or 22.1 percent and Region III – Central Luzon with PhP 27.1 billion or 16.1 percent (Table G and Part II – Table 9a). Majority of the investments in Region IVA and Region III are intended for projects in manufacturing and electricity, gas, steam and air conditioning supply while investments in NCR are mostly intended for real estate activities.


16

Figure 7a Total Approved Investments of Foreign and Filipino Nationals by Region (in million pesos)

Q3 2015

Sources of data: AFAB, BOI, BOI-ARMM, CDC, CEZA, PEZA, SBMA B.3.2 January to September 2015 Region IVA – CALABARZON stands to receive the largest amount of investments from foreign and Filipino nationals in the first nine months of 2015. Total investments pledged to Region IVA amounts to PhP 132.0 billion or 37.2 percent of the total investments. However, investment commitments intended for the region dipped by 5.7 percent during the period. The National Capital Region (NCR) received the second largest amount of total investment pledges during the period, accounting for 21.0 percent or PhP 74.6 billion while Region III – Central Luzon received the third largest share of commitments at 13.2 percent of the total investment pledges. FI approvals for NCR and Region III also registered declines, at 41.2 percent and 62.3 percent, respectively (Table H and Part II – Table 9b). Majority of the investments in Region IVA and Region III are intended for projects in electricity, gas, steam and air conditioning supply and manufacturing. For NCR, the ventures would be mostly in real estate activities.


17

Figure 7b Total Approved Investments of Foreign and Filipino Nationals by Region (in million pesos)



B.3 Projected employment from approved investments of foreign and Filipino nationals

B.3.1 Third quarter 2015 Total projects of foreign and Filipino investors approved by the seven IPAs for the third quarter of 2015 are expected to generate 48,776 jobs, a decline of 10.7 percent from last year’s projected employment of 54,606 in the same period. Out of these anticipated jobs, 78.1 percent would come from projects with foreign interest.

Figure 8a

Projected Employment Q3 2014 and Q3 2015


54,606

48,776

40,588 38,086

-

20,000

40,000

60,000

80,000

100,000

120,000

Q3 2014 Q3 2015

on Total Approved Investments

on Total Approved Investmentswith foreign interests


18

Projects registered through PEZA posted the largest number of prospective employment at 25,963, contributing 53.2 percent of the total expected jobs for the period. BOI-approved projects recorded 13,521 potential jobs, with a share of 27.7 percent while pledges coursed through CDC are expected to generate 3,539 jobs or 7.3 percent. Meanwhile, the combined investments from AFAB, BOI-ARMM, CEZA, and SBMA are expected to generate 5,747 jobs (Part II – Table 10a).


For the first nine months of 2015, a total of 130,169 jobs are expected to be generated from approved investments of foreign and Filipino nationals, 41.3 percent lower compared to 221,930 jobs last year. Around half, or 51.8 percent of jobs would come from investment pledges coursed through PEZA followed by BOI with 45,439 jobs which represents 34.9 percent of the total projected employment. Other IPAs would have a combined share of 13.3 percent of the total jobs expected (Part II – Table 10b). The number of potential jobs expected from foreign and Filipino ventures increased for investments coursed through BOI, BOI ARMM, and CEZA, growing by 19.0 percent, 76.5 percent and 83.5 percent, respectively. Projected employment declined for the rest of the IPAs during the period.

Figure 8b Projected Employment

January to September, 2014 and 2015


B.4 Projected employment from approved investments of foreign and Filipino

nationals by industry

B.4.1 Third quarter 2015

In terms of projected employment by industry, manufacturing is expected to have the most number of jobs to be generated at 15,330 in the third quarter of 2015. However, projected employment for the said industry declined by 39.8 percent compared to last year’s employment of 25,470. Second is administrative and support service activities which is expected to generate 11,834 jobs, lower by 23.1 percent compared to third quarter of 2014. Next is real estate activities which is expected to generate 8,496 jobs (Table I).

221,930

130,169

188,837

87,887

-

50,000

100,000

150,000

200,000

250,000


on Total Approved Investments

on Total Approved Investmentswith foreign interests


19

Table E Projected Employment from Approved Investments by Industry




Of the 130,169 projected jobs in January to September of 2015 from prospective ventures of foreign and Filipino investors, manufacturing (37,643 jobs), administrative and support service activities (36,692), and real estate activities (20,327 jobs) are foreseen to supply the bulk of projected employment with shares of 28.9 percent, 28.2 percent, and 15.6 percent, respectively. The rest of the potential jobs, totaling 35,507 jobs or 27.3 percent, are expected to be provided by the other industries (Table J).

Industry

A. Agriculture, forestry and fishing 867 3,900 8.0 349.8

B. Mining and quarrying 310 - -

C. Manufacturing 25,470 15,330 31.4 (39.8)


conditioning supply

619 827 1.7 33.6



activities

19 5 0.0 (73.7)

F. Construction 916 516 1.1 (43.7)



motorcycles

173 1,349 2.8 679.8

H. Transportation and storage 526 341 0.7 (35.2)


activities

433 272 0.6 (37.2)

J. Information and communication 1,725 4,946 10.1 186.7

K. Financial and insurance

activities

5 148 0.3 2,860.0

L. Real estate activities 7,274 8,496 17.4 16.8



18 87 0.2 383.3


service activities

15,389 11,834 24.3 (23.1)



7 - - -

P. Education 90 - 0.0


activities

727 147 0.3 (79.8)


recreation

- 264 0.5 0.0

S. Other service activities 38 314 0.6 726.3

Total 54,606 48,776 100.0 (10.7)

Q3 2014 Q3 2015Percent to Total

Q3 2015

Growth Rate

Q3 2014 -

Q3 2015


20

Table F Projected Employment from Approved Investments by Industry


Sources of data: AFAB, BOI, BOI-ARMM, CDC, CEZA, PEZA, SBMA C. Approved investments in the Information and Communications Technology (ICT) Industry

C.1 Total approved FI in ICT

C.1.1 Third quarter 2015

Approved foreign investments in the ICT in the third quarter of 2015 amounted to PhP 4.3 billion, up by 5.7 percent compared to the previous year. ICT represents 8.9 percent of the foreign investment pledges during the period. PEZA consistently receives the bulk of investment pledges in ICT, with a share of 93.6 percent during the period. PEZA investments

Industry

A. Agriculture, forestry and fishing 5,707 4,884 3.8 (14.4)

B. Mining and quarrying 545 502 0.4 (7.9)

C. Manufacturing 63,703 37,643 28.9 (40.9)


conditioning supply

2,003 1,122 0.9 (44.0)



activities

115 22 0.0 (80.9)

F. Construction 5,027 12,409 9.5 146.8



motorcycles

975 1,642 1.3 68.4

H. Transportation and storage 1,407 1,150 0.9 (18.3)


activities

5,691 2,492 1.9 (56.2)

J. Information and communication 7,047 8,819 6.8 25.1

K. Financial and insurance

activities

37 164 0.1 343.2

L. Real estate activities 90,091 20,327 15.6 (77.4)



270 453 0.3 67.8


service activities

38,262 36,692 28.2 (4.1)



7 - - -

P. Education 126 5 0.0 (96.0)


activities

813 341 0.3 (58.1)


recreation

31 760 0.6 2,351.6

S. Other service activities 73 742 0.6 916.4

Total 221,930 130,169 100.0 (41.3)

Percent to Total

Jan to Sept 2015

Growth Rate

Jan to Sept 2014 -

Jan to Sept 2015

January to September

2014 2015


21

in ICT increased by 2.5 percent to PhP 4.1 billion, from PhP 3.9 billion in the previous year. (Part II – Table 11a). C.1.2 January to September 2015 Potential foreign investments in ICT in the first nine months of 2015 decreased by 12.1 percent, amounting to PhP 10.5 billion from previous year’s PhP 12.0 billion. FI in ICT coursed through PEZA amounted to PhP 9.3 billion, lower by 16.2 percent compared to PhP 11.1 billion a year ago. Likewise, BOI registered declines in FI in ICT at 18.5 percent during the period (Part II – Table 11b).

FI in ICT would account for 9.9 percent of the total FI registered in January to September 2015 (Part II – Tables 10b and 11b). C.2 Total approved investments in ICT of foreign and Filipino nationals

C.2.1 Third quarter 2015 Pledges in ICT investments made by foreign and Filipino nationals in the third quarter of 2015 amounted to PhP 4.9 billion, up by 4.6 percent from PhP 4.7 billion in Q3 2014. Foreign nationals remained as the major source of investment pledges in ICT, committing 88.1 percent of the total investments in ICT (Table K and Part II – Table 11a).

Table G Total Approved Investments in ICT by Foreign and Filipino Nationals

Third Quarter 2014 and 2015 (in million pesos)


C.2.2 January to September 2015

Overall ICT investments made by foreign and Filipino nationals during the first nine months of the year increased by 31.9 percent to PhP 18.3 billion from last year’s pledges of PhP 13.9 billion (Part II - Table 11b). Foreign investments in ICT declined by 12.1 percent while ICT investments from Filipino nationals grew by 300.7 percent. Potential investments in ICT by Filipino nationals amounted to PhP 7.8 billion, accounting for 42.8 percent of the total approved projects in ICT (Part II - Tables 11b and 5b). C.3 Total approved investments in ICT of foreign and Filipino nationals by ICT sub-

industry

C.3.1 Third quarter 2015

IT services remained as the main recipient of investment intentions in ICT of foreign and Filipino nationals during the quarter as it stands to receive PhP 4.0 billion or 82.4 percent of total ICT projects. Information and communication accounted for 17.6 percent or PhP 859.2

Foreign 4067.5 4,300.9 88.1 5.7

Filipino 601.7 582.9 11.9 (3.1)

Total 4,669.1 4,883.8 100.0 4.6

Growth Rate

Q3 2014- Q3 2015Nationality Q3 2014 Q3 2015

Percent to Total

Q3 2015


22

million. Investments in IT Services dipped by 0.3 percent while investments in information and communication grew by 36.2 percent (Part II – Table 13a).

C.3.2 January to September 2015

Of the PhP 18.3 billion committed by foreign and Filipino investors to fund projects in ICT during the January to September of 2015, 56.7 percent or PhP 10.4 billion would go to IT Services. Information and communication came in second at PhP 7.9 billion, contributing a share of 43.2 percent. (Part II – Table 13b). C.4 Projected employment from approved investments in ICT of foreign and Filipino

nationals by ICT sub-industry C.4.1 Third quarter 2015

Approved investments of foreign and Filipino nationals in ICT are anticipated to create 16,251 jobs in the third quarter of 2015, lower by 1.2 percent compared to the 16,443 jobs expected in Q3 2014. IT services is expected to supply 10,792 jobs or 66.4 percent of total employment in ICT while 5,459 jobs are seen to be generated from information and communication (Table L and Part II – Table 14a). Projected employment from ICT sub-industry accounted for 33.3 percent of total jobs expected from the investment projects of foreign and Filipino nationals approved in the third quarter of 2015 (Part II – Tables 14a and 10a).

Table H

Projected Employment from Approved Investments in ICT by ICT Sub-industry Third Quarter 2014 and 2015

Sources of data: AFAB, BOI, BOI-ARMM, CDC, CEZA, PEZA, SBMA C.4.2 January to September 2015

Projected employment from ICT projects in the first nine months of the year totaled 44,890 jobs, 2.3 percent higher than 43,900 jobs expected in the same period last year. IT services is expected to absorb 35,596 jobs or 79.3 percent of the expected employment while 9,285 jobs or 20.7 percent would be from information and communication (Part II – Table 14b).

Information and

communication

1,698 5,459 33.6 221.5

IT Services 14,745 10,792 66.4 (26.8)

Manufacturing - - - -

Trade - - - -

Total 16,443 16,251 100.0 (1.2)

Percent to

Total

Q3 2015Q3 2015

Growth

Rate Q3

2014-

Q3 2015

Projected Employment in ICT

Q3 2014ICT Sub-industry


23

D. Actual foreign direct investments (FDI) in the Balance of Payments4 D.1 Total BOP FDI in US dollars and Philippine pesos5 D.1.1 Third quarter 2015 Foreign direct investments (FDI) in the Balance of Payments (BOP) as compiled by the Bangko Sentral ng Pilipinas (BSP) recorded a net inflow of US$ 2.5 billion during third quarter of 2015, 74.9 percent higher compared to US$ 1.4 billion in the same period a year ago. Equity other than reinvestment of earnings was at US$ 786.0 million. On the other hand, reinvestment of earnings and net debt instruments recorded US$ 191.0 million and US$ 1.5 billion, respectively, during the period (Part II – Table 15a).

Figure 9a

Balance of Payments FDI (in million US$) Q3 2014 and Q3 2015

Source of data: BSP

In peso terms, FDI net inflows for third quarter of 2015 amounted to PhP 110.5 billion, 76.5 percent higher compared to PhP 62.6 billion in the same period last year (Part II – Table 16a).

D.1.2 January to September 2015

As reported by the BSP, net FDI inflows from January to September of this year amounted to

US$ 4.5 billion, 5.5 percent lower compared to US$ 4.8 billion recorded in the same period in

2014. Equity other than reinvestment of earnings during the period reached US$ 1.4 billion, higher by 26.3 percent in the previous year (Part II – Table 15b).

4 BSP media release dated December 10, 2015

5 Using monthly average buying and selling rates downloaded from BSP website

1,429.0

446.0

180.0

803.0

2,499.0

786.0

191.0

1,522.0

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

Non-Residents'investmentsin the Phils.

Equity other thanreinvestment of earnings

Reinvestment of earnings Debt instruments, net

in m

illi

on

US

$

Q3 2014 Q3 2015


24

Net inflows of reinvestment of earnings reached US$ 577.0 million, a decline by 11.5 percent

compared to the previous year. Meanwhile, net debt instruments registered an inflow of US$

2.5 billion during the period.

Figure 9b Balance of Payments FDI (in million US$)


Source of data: BSP

In peso terms, FDI in the BOP for January to September 2015 recorded a net inflow of PhP 201.4 billion, declining by 5.4 percent from a net inflow of PhP 212.9 billion in the same period last year (Part II – Table 16b).

4,803.0

1,139.0

652.0

3,012.0

4,539.0

1,439.0

577.0

2,523.0

0.0

1,000.0

2,000.0

3,000.0

4,000.0

5,000.0

6,000.0

Non-Residents'investmentsin the Phils.

Equity other thanreinvestment of earnings

Reinvestment of earnings Debt instruments, net

in m

illi

on

US

$

Jan - Sep 2014 Jan - Sep 2015

Documents

Foreign Direct Investments in the Philippines · About this report This report is the 73rd of a series on quarterly statistics on foreign investments (FI) ... (BSP) recorded net inflows