NSCB - 2ndQuarter 2010 Foreign Direct Investment (FDI)

Total approved foreign direct investments (FDI), Q2 and First Semester 2010

Total foreign direct investments (FDI) ¹ approved by the Board of Investments (BOI), Clark Development Corporation (CDC), Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority (SBMA) in the second quarter of 2010 declined by 31.0 percent after posting two consecutive quarters of increase. Total FDI amounted PhP 13.8 billion from PhP 19.9 billion registered in the same period last year (Figure 1a below and Part II –Table 1a).

Meanwhile, the approved FDI in the first and second quarters reached PhP 60.5 billion compared to the PhP 23.9 billion worth of investments approved in the first semester of 2009, brought about by the large amount of FDI approved in the first quarter of 2010 (Figure 1b below and Part II – Table 1b).

The People’s Republic of China (PROC) topped the list of foreign investors, pledging PhP 3.7 billion or 26.7 percent of the total approved FDI in the second quarter, followed by the United States of America (USA) and India accounting for 11.8 percent or PhP 1.6 billion, and 10.7 percent or PhP 1.5 billion worth of pledges, respectively (Part II – Table 2a)

Top prospective investing countries for FDI approved in the first six months of 2010 include Korea, Japan, and Singapore, with Korea leading the list with a hefty investment commitments of PhP 24.2 billion (Part II - Table 2b).

Manufacturing; private services; and electricity, gas and water are the top recipients of FDI intentions in the second quarter of 2010, as these industries stand to receive 30.4 percent, 27.7 percent, 26.3 percent, respectively, of total FDIs approved during the quarter. Manufacturing maintained its top post in the first and second quarters of 2010, receiving a total of PhP 47.1 billion, accounting for 77.8 percent of committed FDI for the first half of the year (Part II – Tables 3a and 3b).

Total approved FDI during the quarter is expected to create 21,581 jobs, 25.6 percent lower than previous year’s 29,006 jobs while a total of 47,655 jobs are projected for the first semester of 2010 (Part II – Tables 4a and 4b).

Foreign direct investments in the Balance of Payment (BOP) ², April – May 2010, and first five months of 2010

FDI in the BOP for April to May 2010 amounted to US$ 50.0 million, 95.3 percent lower than last year’s net FDI inflow of US$ 1.1 billion (Part II – Table 14a). In peso terms, actual FDI in the BOP for April to May 2010 reached PhP 2.2 billion, down by 95.7 percent from PhP 50.7 billion recorded in the same period last year (Part II – Tables 13a).
For the first five months of 2010, FDI in the BOP recorded a net inflow of US$ 446 million, 68.0 percent lower than last year’s US$ 1.4 billion (Part II – Table 14b).

Combined approved investments of foreign and Filipino nationals (Q2 and First Semester 2010)

The combined approved investments of Filipino and foreign nationals in the second quarter of 2010 totaled PhP 172.6 billion, almost three times the PhP 67.4 billion registered in the same period last year (Part II – Table 6a). Filipino nationals dominated the investments approved during the quarter, sharing 92.0 percent or PhP 158.8 billion worth of pledges.
For the first semester, the combined approved investments of Filipino and foreign nationals amounted to PhP 264.4 billion, three times the PhP 86.8 billion committed a year ago (Part II – Table 6b).

Projected employment from approved investments of foreign and Filipino nationals

Total projects approved by the four IPAs for the second quarter are expected to create 29,004 jobs, 15.2 percent lower than last year’s projected employment of 34,216 jobs. Out of these anticipated jobs, 74.4 percent would come from investments with foreign interest (Part II – Tables 4a & 8a).

Summing up the first two quarters, projected employment on approved investment totaled 69,616 jobs up by 15.4 percent from the same period a year ago (Part II – Table 8b).

Approved investments of foreign and Filipino nationals in Information and Communication Technology (ICT)

Investment commitments in information and communications technology (ICT) by both Filipino and foreign nationals during the quarter declined by 34.8 percent from last year’s PhP 6.5 billion to P4.2 billion. However, the large investment pledges in ICT in the first quarter of 2010 brought total ICT investments for the first semester to grow 220.5 percent from PhP 9.0 billion to PhP 28.9 billion (Part II - Tables 9a and 9b). ICT shared 2.4 percent of total investments approved during the quarter, and 10.9 percent in the first semester.

The bulk or 92.7 percent of investments intended for ICT amounting to PhP 3.9 billion would come from foreign nationals. A large chunk of these investments were coursed through PEZA.

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¹ Approved FDI represent 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 Refers to net FDI flows consisting of non-residents equity capital placements less non-residents equity capital withdrawals plus reinvested earnings plus net other capital (intercompany loans).