$31.5 billion: Philippines smashes investment targets, what it means
Record-breaking foreign investments signal brighter growth prospects
Manila: The Philippines is poised to see robust economic growth in 2025 after ending 2024 on a high note.
Despite being beset by natural disasters, including the quadrupple-whammy of typhoons between October and November, the Philippine economy has shown remarkable resilience in 2024.
GDP growth averaged 5.8 per cent for the first three quarters of 2024, National Economic and Development Authority (Neda) Secretary Arsenio Balisacan told local media.
Smashing targets
Meanwhile, the Board of Investments (BOI) and the Philippine Economic Zone Authority (PEZA) smashed their investment targets by an average of 25 per cent.
These milestones – equivalent to $31.5 billion in inward foreign investments – highlight the country's booming appeal to investors, both local and foreign.
Record-setting numbers
BOI: Surpassed its PHP1.5 trillion goal, securing PHP1.62 trillion ($27.86 billion) , a 28% growth from 2023.
PEZA: Approved PHP214.18 billion ($3.68 billion), exceeding its PHP200-billion target by 22%.
Economists see these achievements as proof of the Philippines’ economic recovery, driven by its young, vibrant workforce and cost-effective business landscape.
With over 113 million people – among the youngest populations in Asean – the country is a magnet for foreign direct investments (FDIs).
Foreign investors lead the pack
Switzerland: PHP289.1 billion
Netherlands: PHP44.5 billion
Japan: PHP14.67 billion
South Korea: PHP12.73 billion
Economists credit government reforms, state visits by President Marcos Jr., and international trade deals for bolstering investor confidence.
Big moves for 2025
With targets of PHP1.75 trillion for BOI and PHP250 billion for PEZA in 2025, the nation is poised for continued growth.
New legislation like CREATE MORE and trade agreements with South Korea, the EU, and the UAE aim to keep the momentum going.
Key policy reforms
The Philippines has embraced the following key policy reforms, to boost its economy and attract investments:
Executive Order No. 59 (EO 59)
EO 59 aims to streamline the permitting process for Infrastructure Flagship Projects (IFPs) to accelerate their implementation and bolster economic growth. Signed by President Ferdinand R. Marcos Jr., EO 59 introduces several key features:
Simplified permitting process: The order reduces the number of agencies involved in issuing licenses for IFPs from approximately 30 to between 12 and 18, minimising bureaucratic hurdles.
Review of Citizen's Charters: National Government Agencies (NGAs) and Local Government Units (LGUs) are mandated to revise their Citizen's Charters to eliminate redundant procedures, limit signatories to a maximum of three, and permit the use of electronic signatures.
Corporate Recovery and Tax Incentives for Enterprises (CREATE)
This law cuts corporate income taxes and modernises fiscal incentives for businesses. It lowered corporate income tax from 30% to 20% for micro, small, and medium enterprises (MSMEs) and to 25% for larger firms.
It has also streamlined and enhanced tax incentives, including performance-based qualifications and encouraged investments in strategic industries listed in the Strategic Investment Priority Plan (SIPP).
CREATE MORE (2024)
Extension and Expansion of CREATE Benefits
Improved fiscal incentives for priority industries to promote investments in key sectors like renewable energy, advanced manufacturing, and tech startups.
Offered extended perks for export-driven enterprises in the Philippine Economic Zone Authority (PEZA) zones.
Ease of Doing Business Law (RA 11032)
This law simplifies business processes to reduce red tape and boost investor confidence. Among its key features: It has set specific timeframes for government approvals: 3 days for simple transactions, 7 days for complex transactions.
Other features:
Strengthened the Anti-Red Tape Authority (ARTA) to enforce compliance.
Fully implemented single-window electronic platforms for permits and registrations.
Public Service Act (Amendments of 2022)
This law opened critical sectors like telecommunications, transportation, and power distribution to 100 per cent foreign ownership, previously limited to 40 per cent, with the ultimate aim to modernise infrastructure and attract global players.
Renewable Energy Act Amendments (2022)
Allowed full foreign ownership of renewable energy projects.
Encouraged investment in solar, wind, hydro, and geothermal energy.
Positioned the Philippines as a regional leader in clean energy innovation.
Revised Foreign Investments Act (RA 11647)
Eased restrictions on foreign investments in startups and MSMEs by reducing minimum paid-up capital requirements.
Created an inter-agency Foreign Investment Promotion Board to streamline approvals for foreign-led ventures.
Free Trade Agreements (FTAs)
South Korea-Philippines FTA (Effective December 31, 2024): Lowered trade barriers for various goods, boosting bilateral economic ties.
Reinitiated talks for the Philippines-European Union FTA and finalized a Comprehensive Economic Partnership Agreement (CEPA) with UAE.
Build, Better, More (BBM)
A continued push for infrastructure, focusing on transportation, energy, and digital connectivity.
Policies to attract public-private partnerships (PPP) streamlined and incentivised.
Amendments to Retail Trade Liberalisation Act
Lowered the minimum paid-up capital for foreign retailers from $2.5 million to $500,000.
Simplified registration processes to attract more international brands and chains.
These policy reforms in general, and EO 59 in particular, will scrub delays in the execution of priority projects, making the Philippines a more attractive destination for investment and infrastructure development.
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