Thursday, 17 March 2011

BoI: Investment pledges jumped 185% to P28.2b

by Julito G. Rada
Manila Standard
http://www.manilastandardtoday.com/insideBusiness.htm?f=2011/march/16/business2.isx&d=2011/march/16

The Board of Investments approved P28.24 billion worth of investment pledges in the first two months of the year, up 185 percent from P9.917 billion year-on-year.

BoI executive director Lucita Reyes said the agency approved 36 projects, 64 more from the 22 projects cleared a year ago.

“The first two months’ performance showed us we are on the right track of surpassing the BoI investment target this year of P258 billion,” she said.

Employment to be generated from the investment commitments, however, fell 16 percent to 4,225 from 5,007 on year because many of the projects were registered in the renewable energy sector that required automation and less workers.

The BoI earlier projected lower investment pledges of P258 billion this year, a 10-percent drop from last year’s P285 billion, because independent power producer administrators, which comprised half of the total commitments in 2010, would no longer be qualified for fiscal incentives.

Trade Undersecretary and BoI managing head Cristino Panlilio said the IPPAs comprised the bulk of investment commitments last year. Investment pledges in 2010 rose 5.6 percent to P301 billion.

“Investment approvals for independent power producer administrators alone in 2010 hit almost P150 billion. So we projected a lower target for this year,” Panlililo said.

But he said the expected surge in investments in infrastructure projects this year under the public-private partnership initiative could fill up the void left by IPPAs.

“We should get at least five PPP projects this year to compensate what would be lost,” Panlilio said. The BoI in September last year excluded applications of IPPA projects from the grant of incentives. Independent power producer administrators are companies with the right to sell the contracted output of power plants.

The BoI and the Philippine Economic Zone Authority contribute about 90 to 95 percent of the country’s overall investment pledges. The rest come from Clark Development Corp., Subic Bay Metropolitan Authority, Philippine Retirement Authority and other investment promotion agencies.

Panlilio expressed optimism that the business environment would be stronger this year with the implementation of the PPP projects.

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