Investments agencies surpass 2024 target

The Philippines marked a banner year for investments in 2024, with the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) exceeding their annual approval targets. The achievement signals a bright outlook for the country’s economy as it heads into 2025.

The BOI reported PHP1.62 trillion in investment pledges, surpassing its PHP1.5 trillion goal and reflecting a 28% increase from 2023. Meanwhile, PEZA approved PHP214.18 billion in investments, exceeding its PHP200-billion target with a 22% year-on-year increase.

“These figures are strong indicators of the Philippine economy’s resilience and recovery, with investments showing robust growth across various sectors,” said RCBC Chief Economist Michael Ricafort.

Foreign Investments on the Rise

Foreign direct investments (FDIs) accounted for a significant share of the approvals. The BOI recorded PHP383.13 billion in foreign investment pledges, with Switzerland leading at PHP289.1 billion, followed by the Netherlands, Japan, and South Korea. At PEZA, projects with foreign capital reached PHP102.64 billion.

Ricafort attributed the uptick to the Philippines’ positioning as a cost-effective alternative in the global supply chain, coupled with its young and growing population, which makes it an attractive market for investors.

The economist also noted that investment commitments secured during President Ferdinand R. Marcos Jr.’s foreign trips contributed to the surge. As of June 2024, the Department of Trade and Industry (DTI) reported over PHP4 trillion in potential investments resulting from these engagements.

CREATE MORE Sparks Investment Turnaround

The passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) law in November played a crucial role in boosting investment activity. The law provides enhanced fiscal incentives for strategic economic activities, driving renewed investor confidence.

PEZA Director General Tereso Panga credited the law for reversing a prior slowdown in project registrations. PEZA exceeded its annual target as early as November, adding PHP13 billion in December alone.

“This law gives us greater leverage in promoting the Philippines as the premier investment hub in Southeast Asia,” said Panga.

Building Momentum for 2025

For the coming year, the BOI is targeting PHP1.75 trillion in investments, while PEZA aims for PHP250 billion. Experts believe these goals are achievable, given the expected benefits of CREATE MORE and anticipated reductions in borrowing costs due to potential interest rate cuts.

Trade and Industry Undersecretary Ceferino Rodolfo emphasized the need for market diversification and strengthening trade partnerships. The Philippines is actively pursuing free trade agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPA) to enhance its global investment appeal.

With new trade deals, including the Philippines-South Korea FTA and ongoing negotiations with the European Union and the United Arab Emirates, the country is well-positioned to attract diverse investments and sustain its economic momentum.

As 2024 closes on a high note, the Philippines is poised to capitalize on its strengthened economic foundation and robust investor confidence, setting the stage for another year of growth and opportunity.