PEZA Official Says More Investment to Enter PHL After May National Elections
By Revin Mikhael D. Ochave, Journalist
FURTHER INVESTMENTS are expected enter the country after the May elections as investors await the new the administration, according to the top Philippine Economic Zone Authority (PEZA) official.
“We are not out of the coronavirus disease 2019 (COVID-19) pandemic yet, plus the war in Ukraine…so we are now in an election period. Investors have this wait-and-see attitude on the outcome of the election. Investors’ increased enthusiasm and hopes come after the elections,” said PEZA Managing Director Charito B. Plaza. Business world by mobile messaging.
The Philippines holds its national elections on May 9. Investors generally seek more clarity on the new president’s possible policies before making any investment decisions.
“Investors are watching the new administration’s policy change affecting investments,” Ms. Plaza said.
Last month, a Bloomberg survey of 28 investors and analysts showed Vice Chairman Maria Leonor G. Robredo was their top pick, while frontrunner Ferdinand R. Marcos, Jr. was second-to-last.
However, recent data from the Commerce Department showed that the combined investment pledges approved by PEZA and the Board of Investments (BoI) plunged 90% to 12.82 billion pesos over the course of the year. Iffirst two months of 2022, compared to the 133.24 billion pesos recorded in the same period last year.
Disaggregated, PEZA investment pledges fell 53% to P5.27 billion between January and February, while BoI investment pledges fell 94% year-on-year to 7.55 billion pula.
Despite the lackluster start to 2022, PEZA is now targeting 7-8% growth in investment approvals for 2022. This is above the agency’s previous growth target of 6%.
Ms. Plaza said that PEZA revised its investment target after the adoption of the three economic liberalization measures aimed at boosting foreign investment.
“With the three historic laws (amendments to the Civil Service Law, the Retail Trade Liberalization Law and the Foreign Investment Law), we are seeing high investment after (the) elections,” Ms. Plaza said. . “When we target, we also have to double our marketing efforts to achieve the goal.
The government said these three measures will help the economy recover faster from the coronavirus pandemic. Economic managers are targeting gross domestic product (GDP) growth of 7-9% this year, faster than the 5.6% GDP expansion in 2021.
Under the amended Civil Service Law, foreigners can now fully own public services such as telecommunications, inland navigation, railways and subways, airlines, highways and tolls, and airports after being expelled from theIfof public utility.
Prior to the amendment, these services were formerly classified as utilities and were covered by the 40% foreign ownership cap provided for in the 1987 Constitution.
The amended law on foreign investment allows foreign investors to invest in a national company up to 100% of its capital and allows foreigners to establish themselves at 100%.
The amended Retail Trade Liberalization Act lowered the minimum registered capital of foreign retailers from $2.5 million to P25 million.
In 2021, PEZA approved a total of P69.30 billion in investments. Some of the investments came from the manufacturing industry, which generated 25.51 billion pesos of investments and from the information technology (IT) industry with 7.322 billion pesos of investments.
Additionally, the agency reported that its export revenue for 2021 rose 14% to $63.061 billion from $55.309 billion in 2020.