MANILA, October 21, 2004 (STAR) By Marianne V. Go - The Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) reported yesterday that aggregate investments surged by a dramatic 474.09 percent to P146.57 billion in the first eight months of the year from only P25.53 billion in the same period last year.

The infrastructure sector was the top investment destination during the eight-month period with inflows reaching P111.30 billion, a sharp 1,632.39- percent increase from last year’s level.

Investments in manufacturing and services projects grew by 88.65 percent to P35.27 billion from P18.70 billion during the same period last year.

Trade and Industry Undersecretary and BOI Managing Head Elmer C. Hernandez said that while investment in manufacturing and services constitute only 24.06 percent of total approved investments, these however, account for 98.95 percent or 47,333 jobs of the total employment to be generated.

Hernandez said that investments in infrastructure improve the business condition of the country and is vital in attracting more firms to do business in the country.

"Infrastructure lays down the necessary platform from where firms can establish their operation. The better the infrastructure the more chances the country can attract business," Hernandez said.

Hernandez admitted though "it is in manufacturing and services that the country can generate more jobs for the population. In infrastructure, most jobs are generated during the construction phase while jobs in manufacturing continue as long as the firms are operational."

For his part, Trade and Industry Secretary Cesar V. Purisima said capital inflow from foreign investors rose by a strong 730 percent to P128.187 million in the first eight months of the year from P15.435 million recorded a year ago.

Purisima pointed out that "increased foreign capital infusion is a signal that foreign business confidence on the Philippines is on the rise and we expect more offshore firms to make their firm commitment to locate here before the year ends."

Although foreign direct investment (FDI) has increased during the period, Purisima said the amount of investments is meager compared with other ASEAN countries and Asian neighbors such as India and China.

"The government intends to correct this situation by making the country a preferred FDI destination and one way is through the incentives rationalization plan of the government. We have to make our incentives at par or even better than our Asian neighbors if we intend to attract the big ticket projects that are going to the Asian region."

Hernandez clarified, however, that "the government does not just easily give incentives. It has stringent criteria for projects to pass before these are given. Aside from employment generation and the amount of capital being infused, criteria for giving incentives include the impact of the project to the community/country and the appropriateness of the technology being introduced."

The contact center industry continues to generate most of the investments in the IT sector for the eight-month period.

Capital infused into the sector is registered at P4.18 billion or 78.25 percent or 78.25 percent of total IT investments.

The continued growth of investments in the IT services sector for the eight-month period was driven by expansion projects of existing IT firms and entry of new players, creating 11,338 jobs and bringing in total investments to P5.34 billion or 46.01 percent higher than the same period last year.

Likewise, more IT projects were approved during this period as 56 projects were registered compared to the 44 made last year.

"Our outbound investment missions have been successful in promoting the country to prospective investors. Furthermore, the successful operations of existing notable firms in the country served as powerful testimonial to foreign firms that profitable business can be made in the Philippines," Purisima said.

Reported by: Sol Jose Vanzi

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