APPROVED foreign investment pledges plunged nearly 50% in the third quarter as investor sentiment soured due to the corruption scandal involving government infrastructure projects, the local statistics agency said.
Preliminary data from the Philippine Statistics Authority (PSA) showed the value of foreign commitments approved by investment promotion agencies (IPAs) fell by 48.7% to P73.68 billion in the July-to-September period from P143.74 billion in same period last year.
However, this was the highest amount of investment pledges since the third quarter of 2024.
Ser Percival K. Peña-Reyes, director of the Ateneo Center for Economic Research and Development, said the decline in approved investments can be attributed to the weaker investor sentiment.
“Tingin ko. Wala pang nakukulong eh (I think so. No one has been imprisoned yet),” he said in a Viber message, when asked if this sharp slump in approved investments will likely persist in the fourth quarter until 2026.
Quarter on quarter, the approved pledges rose by 9.34% from P67.38 billion in the second quarter.
Singapore was the top source of foreign investment pledges in the third quarter with P20.26 billion (27.5%), followed by Japan with P13.59 billion (18.4%) and Cayman Islands with P13.14 billion (17.8%).
Investment commitments from South Korea stood at P5.57 billion (7.6%), while those from China stood at P4.51 billion (6.1%)
PSA data showed the investment pledges were approved by seven IPAs — the Authority of the Freeport Area of Bataan, Bases Conversion and Development Authority (BCDA), Board of Investments (BoI), Clark Development Corp., Clark International Airport Corp., Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority.
The PEZA approved foreign investment pledges worth P47.29 billion, accounting for the bulk or 64.2% of the total in the third quarter.
Meanwhile, BoI approved P20.22 billion worth of pledges (27.4% share), followed by BCDA with P5.1 billion (6.9% share).
In the July-to-September period, the Bangsamoro Board of Investments, Cagayan Economic Zone Authority, John Hay Management Corp., the Poro Point Management Corp., Tourism Infrastructure and Enterprise Zone Authority, and Zamboanga City Special Economic Zone Authority did not approve any investment pledges.
In addition, the PSA said about 49% or P36.12 billion of the approved foreign investments will go to the manufacturing industry, while 24.4% or P17.98 billion will be invested in the electricity, gas, steam and air-conditioning supply sector.
The real estate sector cornered P11.86 billion or about 16.1% of the total pledges.
By region, Calabarzon received P28.23 billion or 38.3% of investment pledges, followed by Central Luzon with P16.42 billion (22.3% share) and Bicol Region with P13.03 billion (17.7% share).
Meanwhile, the PSA said investment pledges from both foreign and Filipino nationals in the third quarter fell by 36.1% to P343.77 billion from the P538.36 billion a year earlier.
Of the total, Filipino nationals contributed P270.1 billion or 78.6% of investment pledges.
This brought total approved investments to P343.77 billion, down 36.1% year on year.
If these materialize, around 27,605 jobs are expected to be created from these investments.
The PSA data on foreign investment commitments, which may materialize in the near future, differ from actual foreign direct investments tracked by the Bangko Sentral ng Pilipinas for the balance of payments. The central bank’s monitoring goes beyond the projects and includes other items such as reinvested earnings and lending to Philippine units via their debt instruments. — Aubrey Rose A. Inosante
