The Philippine Economic Zone Authority (PEZA) expressed optimism on Wednesday about a rebound in foreign direct investments (FDIs) in the fourth quarter, despite a recent decline recorded in August.
“We are optimistic that foreign direct investment (FDI) inflows to the Philippines will strongly rebound in the final quarter of the year, despite the 14.5% contraction in FDI inflows reported by the BSP in August,” said PEZA director general Tereso Panga in a statement.
The Bangko Sentral ng Pilipinas (BSP) reported on Monday that August’s FDI inflow stood at $813 million, down from $951 million in August 2023.
“PEZA’s latest investment approvals indicate a resurgence in FDI, with increasing numbers of projects backed by foreign equity from both new and existing ecozone investors,” Panga noted.
As of October 2024, PEZA has approved PHP 91.8 billion in foreign equity from ecozone locator and developer projects, marking a 20.7% increase compared to PHP 76.0 billion in the same period last year.
Ecozone FDI now represents 74% of PEZA’s total investment pledges for January to October 2024, up from 54% in 2023.
Panga highlighted that with the rapid setup time for ecozone manufacturing facilities, some projects are expected to begin construction and commercial production within the year.
“The CREATE MORE Act will further accelerate FDI inflows and growth in the Philippines’ economic zones. This momentum in ecozone FDI should contribute significantly to higher realized foreign investments, impacting the country’s balance of payments positively through current and financial account transactions from export-oriented ecozone companies,” he stressed.
This new legislation builds upon the economic reforms introduced by Republic Act No. 11534 or the CREATE law, which was passed in 2021. The original law aimed to help businesses recover losses incurred during the Covid-19 pandemic by lowering corporate income tax rates and streamlining fiscal incentives.
Given the Philippines’ status as one of the region’s best-performing economies and the strong macroeconomic fundamentals established by the current administration, Panga said PEZA is confident in surpassing its P200 billion investment target for 2024, thus driving sustained economic growth and opportunity nationwide.
“With the CREATE MORE Act now in place, we are entering a new era of investment-driven growth that will solidify the Philippines as a premier destination for foreign direct investments in Asia," Panga concluded.