By Isa Jane D. Acabal, <\/b>Researcher<\/i><\/p>\n
FOREIGN INVESTMENT pledges within the Philippines rose by 52.3% in <\/span>the primary quarter from a low base <\/span>a 12 months earlier, although commit<\/span>ments fell to their lowest level <\/span>in 4 quarters as analysts cited <\/span>geopolitical uncertainty, elevated costs, and weaker domestic growth <\/span>as risks to investor sentiment.<\/span><\/p>\n Preliminary data from the Philippine Statistics Authority (PSA) showed foreign commitments approved by the country\u2019s investment promotion agencies (IPAs) reached P42.64 billion within the January-to-March period, higher than the revised P27.99 billion logged in the identical quarter in 2025.<\/span><\/p>\n Nevertheless, this was the bottom level in 4 quarters, or for the reason that P27.99 billion recorded in the primary quarter of 2025. It was also lower than the P105.66 billion foreign investment pledges approved within the fourth quarter last 12 months.<\/p>\n Ateneo Center for Economic Research and Development Senior Research Fellow Ser Percival K. Pe\u00f1a-Reyes attributed the rise in approved foreign investment pledges to \u201ca rebound from a low base in 2025, stronger investor interest in key industries\u2026, and improved investment momentum and export prospects despite global uncertainties.\u201d<\/p>\n On the identical note, Cid L. Terosa, an associate professor on the University of Asia and the Pacific, said the sharp growth in foreign investment pledges reflected \u201cimproved investor sentiment.\u201d<\/p>\n He added that developments in latest technology and future-ready economic zones align with the administration\u2019s drive to revitalize the renewable energy, manufacturing, IT-business process management (IT-BPM) and logistics industries, and to streamline investment inflows through reforms equivalent to the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy or CREATE MORE law.\u00a0<\/span><\/p>\n Ruben Carlo O. Asuncion, chief economist at Union Bank of the Philippines, said that despite the sharp year-on-year growth, approved foreign investments remained relatively low, reflecting cautious investor sentiment.<\/p>\n \u201cThe quarter was characterised by fewer large-scale, capital-intensive projects, with many firms opting to delay or phase investments amid global uncertainty. As well as, domestic investment momentum has softened, which likely weighed on overall approvals in the course of the period,\u201d he said in an e-mail.<\/p>\n GEOPOLITICAL RISKS \u201cWhile total approved foreign investments rose sharply 12 months on 12 months, the conflict created economic uncertainty that weighed on investor sentiment in several sectors,\u201d Mr. Pe\u00f1a-Reyes said in a Viber message.<\/span><\/p>\n For Mr. Asuncion, the conflict increased project costs and risk premiums, leading investors to take a wait-and-see approach.<\/p>\n \u201cThis was most evident toward the latter a part of the quarter, when firms began reassessing timelines and costs in light of rising fuel prices and geopolitical risks,\u201d he said.<\/p>\n Mr. Asuncion said the subdued Philippine economy in the primary quarter also weakened near-term investor confidence, \u201cparticularly for projects which can be closely tied to domestic demand.\u201d<\/p>\n The Philippine economy expanded by 2.8% in the primary quarter of 2026, slower than the 5.4% expansion a 12 months earlier and the three% growth within the fourth quarter of 2025.<\/p>\n Mr. Pe\u00f1a-Reyes said slower gross domestic product (GDP) growth \u201csignals that companies and consumers have gotten more cautious about spending and investing.\u201d<\/p>\n \u201cInvestors are fearful about delayed government spending and infrastructure projects, the lingering effects of corruption controversies, rising inflation and oil prices attributable to Middle East tensions, and weaker domestic demand,\u201d he said.<\/p>\n \u201cThe weakened confidence has also affected business expansion plans, consumer spending and stock market sentiment, as investors have turn into more risk-averse amid uncertainty over inflation, government policy delays and external geopolitical shocks,\u201d he added.<\/p>\n Within the three months to March, investment commitments were approved by seven out of 15 IPAs \u2014 Bases Conversion and Development Authority (BCDA), Board of Investments, Clark Development Corp. (CDC), Cagayan Economic Zone Authority, Clark International Airport Corp., Philippine Economic Zone Authority (PEZA), and Subic Bay Metropolitan Authority.<\/p>\n PEZA approved foreign pledges value P19.96 billion, accounting for 46.8% of the entire. This was followed by CDC, which approved P9.27 billion value of commitments (21.7% share), and BCDA with P6.2 billion (14.5% share).<\/span><\/p>\n South Korea accounted for the majority, or 59.5%, of total approved foreign investment pledges value P25.37 billion.<\/p>\n Singapore followed with P3.18 billion in commitments or 7.5% of the entire, while China accounted for P2.54 billion or 5.9%.<\/p>\n In the primary quarter, the Authority of the Freeport Area of Bataan, Bangsamoro Economic Zone Authority, Bangsamoro Board of Investments, John Hay Management Corp., PHIVIDEC Industrial Authority, Poro Point Management Corp., Tourism Infrastructure and Enterprise Zone Authority, and Zamboanga City Special Economic Zone Authority didn’t report any approved foreign investment pledges in the course of the period.<\/p>\n About 24.4% or P10.38 billion of the approved foreign investments were allocated to the humanities, entertainment and recreation industry, while 21.3% or P9.08 billion were intended for manufacturing.<\/span><\/p>\n Accommodation and food service activities accounted for P9.07 billion value of commitments, akin to 21.3% of total pledges in the course of the period.<\/p>\n By region, Central Luzon received the very best share of total approved foreign investment pledges, accounting for 77.6% or P33.08 billion. Calabarzon followed with P3 billion (7% share) and the National Capital Region with P2.13 billion (5% share).<\/p>\n Approved projects with foreign interest are expected to generate 13,108 jobs, down 32.1% from the 19,318 projected jobs a 12 months earlier.<\/p>\n In the primary quarter, combined investment commitments from each foreign and Filipino investors fell by 30.8% to P125.95 billion from P181.97 billion in the identical period in 2025.<\/p>\n The decline in overall approved investments indicated that the rise in foreign pledges was not enough to offset weaker domestic investment commitments.<\/p>\n Investment pledges by Filipinos reached P83.31 billion in the primary three months of 2026, accounting for 66.1% of total approved commitments.<\/p>\n \u201cLooking ahead, foreign investment pledges may remain uneven within the second quarter, as global investors proceed to navigate geopolitical risks and elevated energy costs,\u201d Mr. Asuncion said.<\/span><\/p>\n For full-year 2026, he expects gradual improvement in foreign investment commitments, although still below peak levels.<\/span><\/p>\n \u201cStronger prospects hinge on easing external tensions, clearer global policy signals, and a recovery in domestic growth momentum within the second half of the 12 months,\u201d he said.<\/p>\n For his part, Mr. Pe\u00f1a-Reyes said he expects a \u201cmoderately positive but normalization-driven fairly than boom-driven\u201d outlook for foreign investments <\/span>moving forward.<\/p>\n \u201cSectoral winners are probably manufacturing, digital infrastructure, logistics, mineral processing and export-oriented ecozone projects. The foremost downside risks are global slowdown, geopolitical tensions, weaker FDI (foreign direct investment) appetite, and softer renewable energy investment activity,\u201d he said.<\/p>\n Meanwhile, Mr. Terosa said the slower economic growth in the primary three months of 2026 will likely proceed to influence investor confidence in the approaching quarters.<\/p>\n \u201cParticularly, I expect foreign investment pledges to grow mutedly so long as the Middle East conflict continues to muddle investor plans and rein in business initiatives. If the cessation of the Middle East conflict stays elusive, the expansion of investment pledges and approvals in 2026 can be kept at bay,\u201d he said.<\/span><\/p>\n The PSA data on foreign investment commitments differ from actual foreign direct investments tracked by the Bangko Sentral ng Pilipinas. The central bank\u2019s monitoring goes beyond approved projects and includes reinvested earnings and lending to Philippine units through debt instruments.<\/p>\n<\/p><\/div>\n <\/p>\n","protected":false},"excerpt":{"rendered":" PHILIPPINE STAR\/NOEL B. PABALATE By Isa Jane D. Acabal, Researcher FOREIGN INVESTMENT pledges within the Philippines rose by 52.3% in the primary quarter from a low base a 12 months earlier, although commitments fell to their lowest level in 4 quarters as analysts cited geopolitical uncertainty, elevated costs, and weaker domestic growth as risks to […]<\/p>\n","protected":false},"author":1,"featured_media":334869,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[3952,33,7012,11085],"class_list":["post-334868","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-foreign","tag-investment","tag-pledges","tag-surge"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/334868","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/comments?post=334868"}],"version-history":[{"count":2,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/334868\/revisions"}],"predecessor-version":[{"id":334871,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/posts\/334868\/revisions\/334871"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media\/334869"}],"wp:attachment":[{"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/media?parent=334868"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/categories?post=334868"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/ebiztoday.news\/index.php\/wp-json\/wp\/v2\/tags?post=334868"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"\"](\"https:\/\/www.bworldonline.com\/wp-content\/uploads\/2026\/05\/260525FDI_Q1-1024x1020.jpg\")
<\/p>\n
<\/b>Analysts said the continuing Middle East conflict weighed on inves<\/span>tor sentiment in the course of the quarter and prompted investors to adopt a more cautious stance.<\/p>\n