AS business pledges plunge 71 percent in the first four months of the year, the Board of Investments (BOI) is in pursuit of business leads, including a P500-billion infrastructure project and other ventures from companies relocating from China to boost the economy.
Ceferino Rodolfo, BOI managing head and trade undersecretary, told reporters January to April registrations stood at P84 billion, down from P287 billion in the same period in 2019.
Rodolfo said since the quarantines were imposed due to the new coronavirus disease 2019 (COVID-19) pandemic, the BOI has shifted to facilitating the activities of essential businesses like food, medicines and exempted businesses like business process outsourcing and export manufacturers as well those which have repurposed their manufacturing lines for COVID-related products like personal protective equipment.
Rodolfo said investment figures will be boosted by two major projects in the pipeline, including the P500-billion project seen as the biggest investment to be registered by the agency and another developmental project in support of the telecommunication industry.
Rodolfo said these are on top of the 24 business leads from China, Japan Taiwan and the US that are relocating from China. BOI is also targetting another 135 companies affected by the COVID-19 pandemic and the US-China trade war.
According to Rodolfo, the Philippines has long positioned itself as a complementary and not as an alternative site to China.
In 2019, seven companies in China have relocated to the Philippines bringing in P1.6 billion worth of investments.
Twelve of the 24 notable manufacturing business leads are from Taiwan.
Of the 135 Chinese and non-Chinese being targetted, 16 are Wuhan-based companies affected by pandemic and are engaged in the manufacture of electric equipment and appliances, metal products, auto and auto parts, machinery and equipment; 64 are China-based companies affected by the US-China trade war producing medical devices, optical lenses appliances, furniture; and 55 companies manufacturing COVID- related products such as medical supplies as well as products and electronics components for medical application.
One of the business leads is a company that will produce wiring harnesses in Pangasinan.
Rodolfo said this company will hire 10,000 workers.
Not normal times
According to Rodolfo, Chinese steel giants HBIS Group and Panhua Group will also pursue their pending projects which have been earlier registered at $4 billion and $3.5 billion, respectively,
“The Philippines will accelerate the conversion and realization of these leads by encouraging these companies to expand and diversify to the Philippines ,” Rodolfo said.
In explaining the drop in investments, Rodolfo said “this is not a normal situation”referring to the pandemic which he added is seen by investors as a momentary setback.
“At most, (the effect of the pandemic on investments will be felt) in 2020 to 2021 but after that, (investments will come in). Companies believe the Philippines still has good prospects,” Rodolfo added.
The BOI has yet to revise its target for the year after hitting record $1 trillion pledges in 2019.
Among the April approvals are Anflo Banana Corp.’s P616million project covering the production of Cavendish bananas in Davao Oriental; and Maclin Electronic’s P132 million project involving the production of electronic appliances such as electric fans, washing machines, spin dyers and air coolers in Rizal.
“The downturn is expected due to the COVID-19 pandemic where economic activities and investments are disrupted due to lockdowns around the world. We have to prepare for a v-shaped recovery with a Bounce Back Plan (of the national fovernment). The economy demonstrated its resilience, contracting by just 0.2 percent in the first quarter of this year–a better performance even if compared with developed countries whose contractions have been from anywhere between 4 to 7 percent. The risk of global recession is real but for our part, we are making sure that this is only transitory and we are already laying the foundation for our recovery,” said Trade Secretary Ramon Lopez, BOI chairman.
Approved investments from domestic sources reached P70.7 billion, down 68 percent from P219.7 billion in the same period last year. Approved projects by foreign investors reached P13.4 billion, decelerating by 80 percent from P66.9 billion a year ago.
The transportation and storage sector figures reached P60.2 billion, accounting for 71 percent of the total investment figures. The rest went to real estate (P8.8 billion), manufacturing (P5.3 billion), power (P4.2 billion) and accommodation (P3.8 billion).
A total of 70 projects got the nod and once fully operational, these will translate to 11,055 jobs.
France topped among foreign entities with P1.5 billion in capital. Japan is at second with P790 million. Malaysia placed third with P601 million. India and the United Kingdom completed the top five with P325 million and P156 million, respectively.
Repurposed plants
Lopez said the private sector has been quick to respond to the needs of the country in terms of re-purposing their manufacturing capabilities towards essential goods needed in the fight against COVID 19.
“For example, given the export bans imposed by other countries, we have been working hard to increase local production of medical grade masks for our frontliners. As a result, from a pre-COVID capacity of just about 7 million masks and all directed to the export market; the Philippines, by end of this month, would already have an actual capacity level of close to 25 million masks for the domestic market, ” Lopez said,
He added similar public-private collaborations have been undertaken for other critical products including ventilators, face shields, medical coveralls, and rubbing alcohol and disinfectants–where companies have re-purposed their manufacturing facilities to produce these.
Some of re-purposing manufacturing activities enabled these companies to serve the domestic market in addition to their export clients.
For masks, these include Taiwanese firm MedTecs Japanese-owned Yokoisada, EMS, a Filipino toll manufacturer of electronic products for big Japanese companies, P&G , New Kinpo Group, Ever Win and Unisol.
For coveralls, these are members of the Confederation of Wearables of the Philippines,BFS Health Corp. / Baller Sportswear Corp. / Avant Gard North Innovations Inc. / North Pacific Knitting / Endless Knitting and Unisol. th Silver Black
