BOI: Manufacturing, infrastructure sectors to push 2018 approvals to P680 billion

BusinessMirror | By Elijah Felice Rosales – 

The Board of Investments (BOI) is confident that it can hit its ambitious target of P680 billion worth of fresh investment approvals this year with the continuous robust growth of the manufacturing sector.

The investment-promotion agency is coming off a record year with P617 billion in approved investment commitments in 2017.

According to Trade Undersecretary and BOI Managing Head Ceferino S. Rodolfo Jr., manufacturing is expected to boost investments, as the sector continues to grow steadily in recent years, highlighted by a banner performance in the previous year.

“Primarily, manufacturing [will drive investments]. We really foresee a strong and continuous growth of the manufacturing sector,” Rodolfo said in a news briefing on Monday. New investments in the sector almost doubled last year to P96 billion from P49.26 billion in 2016, and was 256 percent higher than the P27 billion in 2016. Rodolfo said manufacturing will continue to grow along with the country’s GDP, especially with its enormous growth in the previous year.

“[We foresee] this would attract more investments—both foreign and local—to the manufacturing sector given [the] strong growth of the domestic consumption,” the trade official said. “In particular, [those] sectors [that are] infrastructure-related and

The government is scheduled to fully roll out this year its infrastructure program—dubbed the “Build, Build, Build” program—and this is also expected to boost investments given that it will create more roads, bridges, mass transport and facilities in Metro Manila and other major urban centers. This, Rodolfo said, will contribute to the growth of those in the businesses related to infrastructure and construction.

Aside from this, Rodolfo added foreign investors who have given their commitments to President Duterte during his trips abroad are expected to come in this year. He said these are the big industrial projects—mostly in steelmaking and shipbuilding—that have done feasibility and technical studies last year.

Moreover, Rodolfo said the country will continue to gain the confidence of foreign investors with the looming discussion on the second package of the government’s Comprehensive Tax  Reform Package (CTRP).

He disclosed that, based on recent talks on the second tax-reform law between Trade Secretary Ramon M. Lopez and Finance Secretary Carlos G. Dominguez III, the government intends to grant more incentives to foreign direct investments.

Investment approvals from last year reached an all-time high of P517 billion, outdoing the BOI’s target of P500 billion. It was the highest in the country’s record books, surpassing the P570.1 billion posted in 1997, which was mainly due to the privatization and liberalization of public utilities, such as water supply and telecommunications, in that year.

A total of 426 projects, mainly in infrastructure and power, comprised last year’s investment pledges. According to the BOI, these projects are expected to generate more than 76,000 jobs once it swings into full operations.

Power and energy projects registered the largest chunk of the pledges at P268.168 billion, with infrastructure and public-private partnership projects at P127.66 billion. On the other hand, real-estate and mass-housing projects posted P86 billion in contribution to investments, while transportation and logistics-related projects reached P15.91 billion.

“This validates business confidence in President Duterte’s economic programs to ensure inclusive growth and shared prosperity for the country.

The influx of investments is definitely steamrolling, as we are expecting sustained higher investments for the next five years,” Lopez said last December.

The all-time record on investments was posted at a time the Duterte administration was facing left and right criticisms here and abroad for the thousands of deaths reported under the war on illegal drugs.