The Philippine Economic Zone Authority (Peza) will be cutting its growth forecast for new investment approvals this year, particularly since tourism and biofuels projects are no longer eligible for Peza registration.
“We have to sit down on the numbers, considering tourism is no longer eligible for Peza registration. We have to look at the targets…we may have to revise from last year because of tourism; the hotels are big investments,” Peza Director General Lilia B. de Lima told reporters.
Peza earlier set a 10-percent increase in fresh-investment approvals for 2015.
“Of course, we want double-digit [growth] like last year. But we have to be realistic,” said de Lima, further saying that an 8-percent growth may be a more grounded target.
Peza can no longer give incentives to projects under the sectors of tourism for the areas of Metro Manila, Cebu, and Boracay, and biofuels pursuant to a resolution it approved in 2012.
Peza set an investments-export revenue-employment growth target of 10-8-8 for 2014. The investment-promotion agency expressed optimism in surpassing the 8-percent growth in employment, but conceded the investment and export goals will be difficult to acheive, mainly because of the bottleneck in Manila’s ports.
Investment approvals in 2014 amounted to $279.477 billion, reflecting a marginal 1.21-percent growth. Given 2013’s actual haul of P276.126 billion, a 10-percent growth could have translated to investments of P303 billion last year.
Exports during the first 11 months of the year reached $40.518 billion, only reflecting a growth of 3.11 percent from the comparable period in 2013. Despite a lower investment target this year, outlook for 2015 is positive as traditional investment areas such as electronics are expected to be buttressed by aerospace and shipbuilding, interest for which has been growing among foreign investors.
On the other hand, the Board of Investments (BOI), the country’s other major investment-promotion agency, is placing its bet on manufacturing to lead the way in attracting investments.
“We shifted our focus on getting quality jobs. We want to continue that with the manufacturing resurgence,” said Trade Undersecretary Adrian S. Cristobal Jr. in a separate interview.
Cristobal said the agency will now focus on getting investments that generate quality jobs, regardless of the amount as part of its “target-focused” investment-promotion strategy this year.
The boost in investments that the BOI garnered in 2013 was due to big-ticket power projects, Cristobal said, the absence of which led to a decline in 2014.
However, the undersecretary noted that power projects are not especially job-intensive ventures, unlike manufacturing.
In 2014 new projects approved by the BOI went down by 24 percent to P354.5 billion, from P466.03 billion posted a year ago.
The decline was mainly due to the 47-percent cut in the BOI’s investment approvals in the electricity, gas, steam and air-conditioning supply sector. In 2014 investments in the sector fell to P174.7 billion, from P331.1 billion posted in 2013.
Manufacturing,however, attracted P24.5 billion worth of investments in 2014, a 77.5-percent jump from the same sector’s haul of P 13.8 billion in 2013.