Investment generation figures collated by a leading Japanese think tank have shown that the Subic Bay Metropolitan Authority (SBMA) is the only Investment Promotion agency (IPA) in the Philippines that turned out a positive output based on year-on-year figures in the first quarter.
According to the Nomura Research Institute (NRI), which prepared a study on the ongoing impact of the global financial crisis on foreign direct investment (FDI) in Asia, the Philippines is also reeling from a decrease in foreign investments due to the current economic slowdown.
However, the NRI study indicated that despite a generally negative record among IPAs in the Philippines, the SBMA, which manages the Subic Bay Free-Port Zone, has reported a 13.6-percent increase in committed investments based on year-on-year figures for the first quarter of 2009.
The NRI, which is reputedly Japan’s largest firm in consulting and system solutions services, prepared the study for the Japan International Cooperation Agency (Jica).
The study, the SBMA said in reaction, only indicated the “apparent resiliency of the Subic Bay Free Port as an investment location.”
According to the first version of the NRI report, which was dated June 2009, FDI commitments secured by the SBMA in the first quarter of 2009 totaled P1.5 billion.
Meanwhile, all of the other Philippine IPAs reported a year-on-year decrease in commitments for the same period, the NRI said.
These included the Board of Investments, which recorded a 57-percent decrease to P4.3 billion; the Philippine Economic Zone Authority (Peza), with a 50.8-percent decrease to P13.6 billion; and the Clark Development Corp., with a 72.5- percent decrease in commitment basis.
Documents gathered by the BusinessMirror showed the NRI prepared the report on FDI commitments in the Philippines for Jica in connection with a proposal for the development of the Philippine Investments Promotion Plan (PIPP).
The PIPP seeks, among others, the creation of an interagency body “to oversee the implementation and monitoring of all programs, activities and projects to improve investment climate” in the country.
The network of IPAs, including the SBMA, “is tasked with formulating and developing strategies to position the Philippines as among the prime investment destinations in Asia,” the NRI said.
In the same report, the NRI mentioned that FDI generation also fell in other Asian countries as a result of the global financial crisis.
These included Thailand, which posted a 26-percent decrease in capital commitments; Vietnam, with a 67-percent decrease in capital realization; India, with a 28-percent decrease in FDI realization; and even China, which suffered a 21-percent decrease in FDI realization.
However, the NRI particularly noted that the Philippines “has attracted far less FDI than its peer Asean countries.”
The SBMA, however, had somewhat bucked the downtrend in investment commitments when it signed up a total of 30 new projects worth P1.5 billion in the first quarter, bringing to 966 the total number of registered investors here.
SBMA Administrator Armand Arreza said the uptrend in Subic was due to a self-sustaining business environment created by the SBMA in Subic over the years “that was directed toward various industries that require less dependence on foreign markets.”
Arreza added Subic’s 2009 investment generation was recently boosted further by new investment pledges worth $86 million by South Korean shipbuilder Hanjin Heavy Industries & Construction Corp., a firm that has already set up a $1.7-shipyard in Subic.
Hanjin officials said the new investments would be for the production of ship components at the Subic facility and would be committed in two parts: $29 million starting September this year, and $57 million next year and onward. (Henry Empeño, Business Mirror Online)
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