The Philippines’ major investment promotion agencies (IPAs) have exceeded their 2024 targets, reflecting robust economic prospects and renewed investor confidence.
The Board of Investments (BOI) reported P1.62 trillion in approved investments for 2024, surpassing its P1.5 trillion target by 8 percent.
Meanwhile, the Philippine Economic Zone Authority (PEZA) closed the year with P214.18 billion in pledges, exceeding its P200 billion goal by 7 percent.
Both agencies recorded significant year-on-year growth, with BOI approvals rising 28 percent and PEZA pledges increasing by 22 percent compared to 2023.
Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael Ricafort attributed the strong performance to the government’s strategic initiatives, positioning the Philippines as a cost-effective hub in the global supply chain.
“The country’s competitive operating costs, skilled workforce, and attractive demographics—being the 12th most populous nation globally with a young median age—make it an appealing market for foreign direct investments (FDIs),” Ricafort said.
Foreign investments approved by the BOI reached P383.13 billion, led by Switzerland (PHP289.1 billion), the Netherlands (P44.5 billion), Japan (P14.67 billion), and South Korea (P12.73 billion). Similarly, PEZA secured P102.64 billion in projects with foreign capital.
Ricafort noted that President Ferdinand R. Marcos Jr.’s recent state visits and international engagements have played a pivotal role in boosting investor confidence. As of mid-2024, the Department of Trade and Industry (DTI) reported a pipeline of investments worth $76.6 billion (approximately P4 trillion) from these trips.
Impact of CREATE MORE
The late-year enactment of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) spurred investment approvals. Signed into law on Nov. 11, CREATE MORE enhanced fiscal incentives for activities listed in the Strategic Investment Priority Plan (SIPP).
PEZA Director General Tereso Panga said the law provided much-needed clarity and competitiveness, allowing the agency to surpass its targets in November. “CREATE MORE positions the Philippines as the premier investment hub in Southeast Asia,” Panga noted.
For 2025, BOI aims to attract P1.75 trillion in investments, while PEZA targets P250 billion. Ricafort expressed optimism about these goals, citing the continued effects of CREATE MORE and anticipated policy rate cuts by the Federal Reserve and the Bangko Sentral ng Pilipinas, which could lower borrowing costs and boost FDI inflows.
The Philippines is also diversifying its investment sources. PEZA is exploring opportunities in the Middle East and Africa, while the DTI is actively pursuing free trade agreements (FTAs) and Comprehensive Economic Partnership Agreements (CEPAs) to expand global trade and investment relationships.
On Dec. 31, the Philippines-South Korea FTA came into effect. Talks for an FTA with the European Union have resumed, and a CEPA with the United Arab Emirates is nearing finalization. The Philippines also launched negotiations for a CEPA with Chile, marking its first agreement with a South American nation.
Challenges ahead
Despite the positive trajectory, Ricafort cautioned against potential risks, including protectionist policies under the next U.S. administration and geopolitical tensions that could disrupt global trade. However, DTI Undersecretary Ceferino Rodolfo highlighted the balanced trade relationship between the Philippines and the U.S., which could mitigate these risks.
“With a trade deficit of only USD4 billion compared to larger deficits with other Asian nations, the Philippines remains a favorable partner for the U.S.,” Rodolfo said, adding that this balanced relationship could provide an edge in navigating future global challenges.
Enhanced credit ratings have further bolstered the Philippines’ attractiveness as an investment destination. In 2024, the country secured two “A—” ratings from the Japan Credit Rating Agency and Rating and Investment Information, alongside a “positive” outlook from S&P Global Ratings.
These developments, coupled with strategic reforms and growing investor interest, position the Philippines for sustained economic growth and increased foreign investment in the coming years.