IIAnONAL STA nST/CAL OORDINA II()I~OOA~OARCH IVES

.Foreign DirectINVESIME ' IS

FIRST QUARTER 2006'

Republika ng PilipinasPAMBANSANG LUPON SA UGNAYANG PANG-ESTADISTIKA

(NATIONAL STATISTICAL COORDINATION BOARD)http://www.nscb.gov.ph

~.

The Forci~n Direct Inn:'stmt.'tl1!' ill Ihe Phiiippilll'!-1:' a lIU:lrll'r1:" puhhclflOll pn.'p.lrl"d hy the J.-::nlllolllK lndlCllOI':, .lll,d :-:.lIdllll \lll 11l111~j)l\ 1'1' '11

of ,it,- :\.\'1'10:\. II. ,T. ITI,TIC.I;. (l lORDI,. ITll', H, , 1I(1l .'-."]'F(lr tcchlllcaillllllllric.':,. plcaH' COlll:lC! 1I:, :l!: IJJ.;~l Kl)(,. -tIS! III vll1.11I11~ .1I :'11','1'" ~. i l'

TERMS OF USE OF l':SClll'lIIlLlC:\TIONSThe ;':'~CB1"c..'!'l'IYc.::,II:' l'xdll~in' ri~hfto rcprodll((' ;llllr~ PUil!lC,111/lI1"11l \\"h.II~'\'l'1 (lllll) • \11', 1\,111 ": til'"

publiCII1(JIl :,houlJ not 1)(, n:pl'Clducl"d. n:copIl'd. lend 01" n:packJ:-:l'd 1('1t Irlll"! 1'.lrlll', 1'(.1 ;111' \"1J1Ill~h-Il"LI: I'lll'" I~-.'."

\\ithoUl W1"1l1(.'1lpl'rl11i~:,ioll from the }:~CB.• _-\Il~' pan of tlll~ puhhclllflll Ill:l: l.nl," hI It ;'1' ,dllt nl :','1 tlllt 11ul \l~l

o[the n:cipit'l1r/Cll:'Tomc:r comp;lll~' .• ~hOllld ;11l~-portion offill' d;ll;llll lh1_'PU1Jil..:;llllIl1.llt.Il' III llH"itl\I~.d 11l.1

1'cp0I"I/ article. thl' ~oun:(.' o( lh" daTa, 1i1l' titlt, of the puhhclIiclll ;jnd rIll' :'<:'(1" .1:-1'1Ihll~hn ,hl.uld .Ii\, ,1,-.1,\- :.11nl• __\ny Illfonlurioll dC1"ln.'d from the manipllb1l011 of daTa (lI1l1al11n!1ll lilt I'llhlJCll11111 \\'Jlln. I I, 'l1,~\"t ],t rill

r(,'~pomjhiLr:. of ~~(1",

PllhlJ~hl'd h:' rhl'~;llIOl1;}J ~t:Hi~!IC1J(flf,rdll1,lfl',l1 HI),lrd

.\lldLmd HUt'ndl;l Btllldll1~.4f).;~t.:n.Gil Jlll)'a: ,\\.l'lllll

.\bkatl (JlY J.:~IH IPlllhrp1l1L'~.

.lunt ~dll(,

Tht Foreign Dirl'ct In\'t'~tlllel1ts in tht' Philippine •• I- :tY.lll.d,J~ ITI

pnntt'd and dl'l:lrcJTll( (lJlm.lI. j-:xl"t'l \\.01"(1 jJ!)j. III (:i)l~lllll

KICk l.~llt.~ tI(dll~ puldlClll:1l' .ll't ;1\.li!.lhk (II:' 1'1Ildl.l".!'or dL'l;uk pll';l~t. (0111a(l U:-;lI ('.;: .•.••I}II_:-\_L:i(,III .1: I;JI~~i1.11~1I "'.' "I,

NSCB PublicationsRegular Publications

Economic and Social Statistics and Indicators (National)• Philippine Statistical Yearbook• Economic and Social Indicators• StatWatch• Compendium of Philippine Social Statistics• Economic Indicators

o Economic Indicatorso Quarterly Economic Indiceso Foreign Direct Investmentso Food Balance Sheet of the Philippines

• Socia/Indicatorso Women and Men in the Philippineso Statistical Report on Children and Womeno Report on the Philippine Human

Development Index .o Philippine Poverty Statistics

. 0 Philippine Provincial Poverty StatisticsNational Accounts of the Philippines (NAP)

• Quarterly. Semestral and Annual NAP• Gross Regional Domestic Product• Gross Regional Domestic Expenditure• Input-Output Accounts• Philippine National Health Accounts• Philippine Education Accounts

Sub.national Statistics• The Countryside in Figures

(Philippines. Western Visayas Region,Province of Guimaras)

• Regional Social and Economic Trends (RSET)(CAR, I , IV, V, VI, VIII, IX ,XII)

• Southern Mindanao Statistical Yearbook• Statistical Handbook on Women and Men

(Philippines, I, V, VI, VIII, IX, XI, XII)Serial Publications

• Factsheets• NSCB Statistics Series

o Metro Manila: A Gateway to thePhilippines

o The International Revenue Allotment (IRA)as a Source of Funds for LocalGovernance

o Statistical Capacity Building in thePhilippine Statistical System

o Reported Rape Cases in the Philippines• NSCB Technical Papers

o Environmental Accounting in thePhilippines

o Poverty Assessment in the Philippineso Rebasing, Linking and Constant Price

Estimation of the National Accounts of thePhilippines

o Recent Initiatives of the NSCB inImproving Official Statistics in thePhilippines

o Measuring the Contribution of the InformalSector in the Philippines

o Enhancing the Relevance of the PSNAo Challenges in the Compilation of Official

Poverty Statisticso NSCB Techrical Paper on The NSCB: Our

Products and Services

Others

Standard Classifications• Philippine Standard Industrial Classification

(PSIC)o PSIC Ammendment 1997

• Philippine Standard CommOdity Classification(PSCC), Rev. 2 993o PSCC Ammendment 1999

• Philippine Standard Classification for Education(PSCEd)

• Philippine Standard Occupational Classification(PSOC) Io PSOC Update 2003

• Philippine Central Product Classification(PCPC) I

Proceedings of Conventions• National Convenlron on Statistics• Asian Regional Section, International

Conference on Statistical ComputingReference Materials I

• Inventory of AirpOrts• Inventory of Port~• Philippine Statistical Development Program,

1999-2004 I• Profile of Censuses and Surveys• Directory of Statistical Services in the

Philippines I• Catalogue of Philippine Statistical Publications• Directory of Selected Statistical Terms• Manual on the Preparation of Statistical Project

Proposals• A Guide to Statistics for Business Plannino

F,'• ramework for the Development ofEnvironment Statistics. '• Registry of Top Foreign Direct InvestmentEnterprises in th~ Philippines

• Compendium of PI hilippine EnvironmentStatistics

• State of the Philippine Land and SoilResources I

• Statistics for Entrepreneurs

Other NSCB Products and Services

Products

1. Statistical policies and measures to resolve specific issues and provide policydirections in the Philippine Statistical System

2. The Philippine Statistical Development Program (PSDP) to serve as blueprint ofpriority programs and activities to be undertaken to improve the Philippine StatisticalSystem in the Medium Term

3. National Accounts and related economic accounts to assess the economicperformance of the country thru the following:

• National AccountsRegional AccountsInput-Output (1-0) Accounts

• National Health AccountsNational Education Accounts

4. Other social and economic indicators• Poverty statistics

Environment statistics• Food balance sheet

Indicators on children and women• Gender and development statistics

Quarterly economic indices• Foreign investments

Leading economic indicatorsEconomic and social impact analysis indicatorsHuman development index

5. Standards and classification systems to prescribe uniform standards in governmentstatistics

• Philippine Standard Occupational Classification (PSOC)Philippine Standard Commodity Classification (PSCC)

• Philippine Standard Industrial Classification (PSIC)Philippine Standard Geographic Code (PSGC)Philippine Standard Classification of Education (PSCED)

• Philippine Classification of Commodities by Broad Economic Categories(PCCBEC)Philippine Central Product Classification (PCPC)

6. Statistical publications to disseminate the most relevant information produced by thePSS and to make statistics more accessible to the public

Services

1. Maintenance of a one-stop statistical information center2. Monitoring of designated statistics3. Coordination of subnational statistical system4. Coordination of inter-agency concerns on statistics5. Survey review and clearance6. On-line statistical service through the internet (www.nscb.Qov.ph)7. Servicing data requests8. Technical services9. Advocacy for statistical awareness

National Statistics Month• National Cpnvention on Statistics• Government Statistics Accessibility Program• Hosting of international conferences in statistics

Republlke ng PilipinesPAMBANSANG lUPON SA UGNAYANG PANG-ESTADISTIKA,

(NATIONAL STATISTICALCOORDINATION BOARD)1", 2nd a. 5"' FloorsMIdland Buendia Building I

403 Sen, GHJ, Puyal Avenue, Makati Cily 1200

MEMORANDUM

FOR:

FROM:

RE:

DATE:

Her ExcellencyPresident GLORIA MACAPAGAL ARROYO

The Honorable ROMULO L NE~ _Secretary of Socio-Economic P~ng - Iand Chairman of the N7tatistical Coordination Board

The Honorable PETER B. FAVILA e><!!iliJ0.~,~ [.Secretary ~f the Department of Trade and Industry fioFOREIGN DIRECT INVESTMENTS IN THE PHILIPPINESFirst Quarter 2006

01 June 2006

1. We are pleased to submit the First Quarter 2006 Report dn Foreign DirectInvestments (FDI) in the Philippines as compiled by the TeChnical Staff of theNational Statistical Coordination Board (NSCB), in cOllaboratioi' with the memberagencies of the NSCB Inter-Agency Committee on Foreign Direct InvestmentStatistics (IACFDIS).

2. The NSCB IACFDIS is composed of the: NSCB as Chair, the Board ofInvestments (BOI) as Co-Chair, and the Bangko Sentral ng pilipinas (BSP), theSecurities and Exchange Commission (SEC), the Bureau of ITrade Regulationand Consumer Protection (BTRCP), the Philippine Economic Zone Authority(PEZA), the Subic Bay Metropolitan Authority (SBMA), the clark DevelopmentCorporation (CDC), the National Economic and Development IAuthority (NEDA)and the National Statistics Office (NSO), as members.

3. This report is based on the consolidated administrative data of the investmentpromotion agencies, namely, the BOI, PEZA, CDC and SBMA, imd the BSP.

4. The highlights of the report are as follows:

Approved Foreign Direct Investments

First Quarter 2006

4.1 Total approved foreign direct investments (FDls) doubled in t e first quarter of2006, climbing to PhP 63.5 billion as against PhP 31.5 billion worth of pledgesposted in the first quarter of 2005.

leI. No~ 895-2395 897-2171 896-4665896-1787 896-1796 896-7975

FexNo~ 895-2765 890-8456

URL:http://www.nscb.gov.phE-mail eddress:lnlo@nscb.gov.Ph

4.2 The staggering growth during the quarter was primarily due to the PhP 59.6billion worth of investment pledges in manufacturing, which claimed a 94percent share in total approved FDls during the period.

4.3 Of the four investment promotion agencies (IPAs), SBMA recorded the largestFDI pledges, worth PhP 51.4 billion accounting for 81 percent of the total FDlsreceived during the quarter.

4.4 Korean nationals, the biggest source of FDls for the quarter, poured in PhP51.7 billion worth of investment pledges, more than four hundred percent higherthan last year's PhP 9.6 billion. Korean investments account for 81 percent ofthe total investments during the quarter. USA came in at far second, with PhP6.4 billion worth of investments, contributing 10 percent to total FDI for theperiod.

4.5 Projected employment from approved projects with foreign interests wasestimated at 32,434 jobs, up 98 percent from its year-ago level of 16,415 jobs.PEZA-approved FDls are expected to generate the highest number ofemployment, at 20,171 new jobs, 62 percent of the total projected employmenton projects committed by foreign nationals.

Approved investments, foreign and Fiiipino nationals

First Quarter 2006

4.6 The combined committed investments of foreign and Filipino nationals in thefirst quarter of 2006 grew by 11 percent, from PhP 66.1 billion in the first quarterof 2005 to PhP 73.0 billion in the same period of 2006.

4.7 As the share of investment commitments from foreign nationals expanded two-fold, from PhP 31.5 billion in 2005 to PhP 63.5 billion in 2006, investmentpledges of Filipino investors meanwhile, declined by 72 percent in the first threemonths of 2006.

4.8 SBMA reported a hefty increase in investment proposals amounting to PhP51.7 billion during the quarter, mostly coming from foreign nationals, particularlythe Koreans. Although CDC received the smallest amount of the investmentpledges during the period, it however, showed a substantial improvement in itsapproved FDllevels, from a very low PhP 57.4 million in 2005 to PhP 1.2 billionin 2006.

4.9 Eighty-five percent of the approved investments during the period or PhP 61.9billion, shall be channeled to manufacturing while the remaining 15 percentshall be intended mostly for services and finance & real estate at PhP 5.5 billionand PhP 5.4 billion, respectively.

4.10 Approved projects for the period are expected to create 37,999 jobs, 82 percenthigher than last year's projected employment of 20,877 jobs. Projectsregistered through PEZA recorded the highest projected employment

equivalent to 23,039 potential jobs or 61 percent of the total projectedemployment for the period. SBMA-approved projects tallied 7,731 potential jobscontributing about 20 percent to the total projected employm~nt on approvedinvestments for the first quarter of 2006. I

Approved investments in the Information and Communications Technology(ICT) Industry

First Quarter 2006

4.11 The influx of proposed investments in the information and communicationstechnology weakened during the period as it dropped to PhP 3~6billion, from aPhP 6.1 billion level in 2005. The slump was largely due to Ithe 43 percentdecline in proposals from foreign nationals in the ICT. Potential investments inICT with foreign interests account for 92 percent of the total approvedinvestments for the sector.

4.12 Proposed investments in ICT are mainly concentrated in manufacturing and ITservices garnering 22 percent and 78 percent, respectively, pf the PhP 3.6billion worth of committed investments in ICT during the first quarter of 2006.

4.13 ICT-related investments are expected to generate 17,427 additional jobs in thecountry, 170 percent higher than last year's expected employment at 6,461 jobsfrom ICT-related projects.

Actual foreign direct investments in the Balance of Payments

Fourth Quarter, 2005

4.14 The Bangko Sentral ng Pilipinas (BSP) posted a 102 percent ~igher net inflowof actual foreign direct investment in the country during the fourth quarter of2005 as the non-residents' investment in the Philippines reached PhP 20.7,billion during the period vis-a-vis the PhP 10.2 billion BOP FDI registered in thesame period of 2004. I

4.15 Other capital attained the PhP 15.5 billion level, more than 600 percent largerthan the 2004 level of PhP 2.1 billion. Net equity capital dropped to a net inflowof PhP 5.3 billion, 13 percent lower than last year's PhP 6.1 billion. Reinvestedearnings experienced a turnaround from a net inflow of PhP 2.0 billion in thefourth quarter of 2004, against the net outflow of PhP 109.2 mil ion in the sameperiod in 2005

January to December, 2005

4.16 The annual BOP FDls exhibited a promising outlook as it reached PhP 62.4billion in 2005 vis-a-vis 2004's performance level of PhP 38.6 bijlion, registeringa 62 percent increase during the period. The annual growth wa~ made possiblethrough the positive performances of both net equity capital a d other capital,which increased by 36 percent and 153 percent, respectively.

4.17 For Her Excellency's information.

Foreign Direct Investments in the Philippines:First Quarter, 2006

Total approved foreign direct investments (FDls) doubled in the first quarter of 2006,reaching PhP 63.5 billion worth of investment commitments as against PhP 31.5billion FDI pledges posted in the first quarter of 2005. ("ar: I - rl9ure A & TaDle .to., anePart II - TaDle 1a S.ri9ure 1). The staggering growth during the quarter was primarilydue to the PhP 59.6 billion worth of investment pledges in manufacturing, whichclaimed a 94 percent share in total approved FDls during the period (Part II - Ta"le :;aand Figure 3}.

Figure AApproved Foreign Direct Investments

First quarter 2005 and 2006

63.5

60.0 -

45.0 -"-~"- 31.5cg 30.0 .:s.E

15.0 -

01 2005 Q12006

Total approved investments, which consists of investment pledges from both foreignand local nationals, grew by 11 percent during the quarter. from PhP 66.1 billion inthe first quarter of 2005 to PhP 73.0 billion in the first quarter of 2006 (Par: II _ Ta"le6E & r:t;lUrE: 7).

About thiS reoort

ThIS report IS tne ttmty S1$ 0' a seres 00 Quarterty staosocs on tDrelgn dlr~! rnvestments(FOts) Jl'1ttle' PhilrpptlleS, integrating tTle Quarterty statlstJca' report5 on FDlS submrtted by thegovernment's Investments Prtlmobon. admrrustnttJon and ""9ulatJoo <lI}ellOeS as o~ 2011 May 2()({j,It PI'tWides an <JIlaIV'Si'S of tne:

(a) Iofflgn dlTf'Ct Investments and Investments lJt" fiITr;mos a{J(YOt'f'd by tne Board ofInvestments (B01), Philippine EconomIC Zone Autnority (PEZA), Gart DeYeIopmemCorooratlOn (CDC), and Suboc Bcly MetTopol".an Allttlonty (SBMA) for the firstQuarter of 2005 to the firs:: Quarte!" Of 2006;

(b) actua' ~n dlflXt mvestments as presented In tTle Balance 0' Payments (BOP) byme Deoartment of EconomIC StatistIC> of the Bang~ Sentral ng PIIr~nas (asP) fortne ftrn Quarter of 2004 to the fourttl Quarter or 2005.

AJso featured are data on loregn dIrect lnvestmerlts ft'9I:Stered through the 5eo.J~ ar.jb::Change CommISSIOn (SEQ arK! the Bureau of Trade Regulaborl and Consume'" Protecbon(BTRCP) of the Dep3rtment of Tracie and Industry (011). Armel< A presents the teeml(al noteon the data and compilation met!'MJdok..",. while Annex fI gr~ a boef bac:'Xground on the ForeIgnlnvestment Information System (FIlS) that QE!nefateS the FOI statrsbCS preented If'I tf1l'Sreport.

InsidePart I - AnalysisA. Approved foreign direct

investments...... 2

B. Approved investments by Rlipinoand foreign nationals................... 3

C. Approved investments in the

Information and CommunicationsTechnology.................................. 4

D. Actual foreign direct investments

in the Balance of Payments......... 5

Part II - Statistical TablesAnnexes

Foreign Direct Investment, 01 2006

Part I

Analysis

A. Approved foreign direct investments

Total approved FDls for the first quarter of 2006 stepped up by a staggering 102percent reaching PhP 63.5 billion from last year's PhP 31.5 billion worth of approvals(Par.1- TaoleA & FigureA and Par; II - Table i a & Figure i).

Table AApproved foreign direct investments:

First quarter 2005 and 2006In million pesos

Q12006Q1 2005InvestmentPromotionAgency

BOI

PEZA

SBMACDC

PercentI

ChangeI

19.1151 2,370.1 J (87.6)

11,991.2 8,829.7 (26.4)

367.3 51,385.8 1 1'888.4

31.6 901.2 2,750.2

Total 31,505.2 63,486.7 1101.5

Manufacturing remained as the I~ading recipient of investment Pledgt from foreignnationals, garnering PhP 59.6 billion worth of investment commitments during theperiod (Pa~,II - TablE30 ano Figure 3). This accounts for 94 percent of the approvedFDls for the quarter. Services placed at distant second with PhP 3.7 billion worth ofapproved FDls, almost 6 percent of the total for the period.

For the first quarter of 2006, SBMA received the largest FDI pledges at PhP 51.4billion, accounting for 81 percent of the potential investments in the country (Par: Ii -Taoie 12). Investment pledges received by SBMA for the quarter were remarkablyhigh, growing 140 times larger than last year's PhP 367 millio~. Investmentscommitted through CDC were likewise higher by 29 times than last year's firstquarter, although its contribution is only 1.4 percent of the total investrrent proposalsapproved for the period. BOI and PEZA both experienced setbacks in approved FDlsduring the quarter as both registered double-digit negative growth rates, at 88percent and 26 percent, respectively, It is worth noting that BOI and PEZA had thelargest approvals during the first quarter of 2005. amounting to PhP 3 .1 billion worthof FDls. or 99 percent of the total committed FDls during that period.

Korean nationals, the biggest source of FDls for the quarter. poured in PhP 51.7billion worth of investment pledges, more than four hundred percent higher than lastyear's PhP 9.6 billion (Par. II - TaolE20 and Figure2/. Korean investme ts account for81 percent of the total investments during the quarter. USA came in second at PhP6.4 billion, contributing 10 percent to total FDI for the period.

2

Foreign Direct Investment, 01 2006

Projected employment from approved projects with foreign interests was estimated at32,434 fresh jobs, up 98 percent from its year-ago level of 16,415 jobs (Part" - Table4b). Despite the lower investment pledges received by PEZA in the first quarter of2006, PEZA-approved FDls were expected to generate the highest number ofemployment, at 20,171 new jobs, 62 percent of the total projected employment onprojects committed by foreign nationals.

B. Approved investments, foreign and Filipino nationals

The combined committed investments of foreign and Filipino nationals in the firstquarter of 2006 grew by 11 percent, from PhP 66.1 billion in the first quarter of 2005to PhP 73.0 billion in the same period in 2006 (Part I - Figure B and Part II - Table 6a &Figure 7). SBMA reported a hefty increase in investment proposals amounting to PhP51.7 billion, mostly coming from foreign nationals, particularly the Koreans, making itthe top IPA with largest commitments among the four IPAs during the period. On theother hand, although CDC, received the smallest amount of investment pledgesduring the quarter, it however, showed a substantial improvement in approvedinvestment levels from a very low PhP 57.4 million in 2005 to PhP 1.2 billion in 2006.

As the share of investment commitments from foreign nationals expanded two-fold,from PhP 31.5 billion in 2005 to PhP 63.5 billion in 2006, investment pledges ofFilipino investors meanwhile declined by 72 percent in the first three months of 2006.

Eighty-five percent of the approved investments during the period or PhP 61.9 billionshall be channeled to manufacturing, while the remaining 15 percent shall beendowed mostly to the services and finance & real estate at PhP 5.5 billion and PnP5.4 billion. respectively (Pa•. I: - ia::>i: bE & =1~:.Jr:~).

Figure BApproved investments, foreign and Filipino nationals:

First quarter 2005 and 2006(in billion pesos)

75.0

60.0

0..

'"0.. 45.0

~:cE 30.0

15.0

66.1

-

-

012005

73.0

012006

3

Foreign Direct Investment, 01 2006

ApP"'" p,,;ed, to' the ""rio' "e e'pecte' to ,,,,Ie 37,999 t" 82 ",,=othigher than last year's projected employment of 20,877 jobs (Part I -1 Table B a~d PartII _ Table 4a & Figure 4). Projects approved through PEZA recorded the highestprojected employment equivalent to 23,039 potential jobs or 61 pefcent of the totalprojected employment for the penod. SBMA-approved projects tallied 7,731 potential

I

jobs contributing about 20 percent to the total projected employment on approvedinvestments for the first quarter of 2006.

Table BProjected employment on approved investments

by Investment Promotion Agency:First quarter 2005 and 2006

Investment Percent to Percent

Prorrotion 012005 012006 total Change

Agency 012006

BOl 6,017 5,479 14.4 (8.9)

PEZA 12.722 23.039 60.6 81.1

SBMA. 1,892 7,731 20.3 308.6

COC 246 1,750 4.6 611.4

Total 2D,ffT7 37,999 100.0 820

C. Approved investments in the Information and Communications Technology(ICT) Industry

The influx of proposed investments in the information and communicationstechnology weakened during the period as it dropped to PhP 3.6 billion. from PhP 6.1billion in 2005 (PaC: II - Table 5a). The slump was largely due to the 43 percentdecline in proposals from foreign nationals in the ICT. Potential investments in ICTwith foreign interests account for 92 percent of the total approved inJestments for thesector (Pa;: I -Ta::>leCan: Pa;: Ii - Table 5a,. IProposed investments in ICT were mainly concentrated in manufacturing and ITservices garnering 22 percent and 78 percent, respectively of th~ PhP 3.6 billionworth of committed investments in ICT during the first quarter of 200 (Pac;: - -;-a::>leCZ:1: ;:>a:-,Ii - ~a~le 5::>/.

4

Foreign Direct Investment, 01 2006

Table CApproved Investments in ICT by ICT sub-industry

Filipino and Foreign: First Quarter 2006(in million pesos)

Filipino Total Percent toSub-industry Foreigntotal

Manufacturing 733.3 48.8 782.0 22.0

IT Services 2,526.3 246.7 2.773.0 78.0

Total 3,259.5 295.5 3,555.0 100.0

Share to total (%) 91.7 8.3 100.0

Notwithstanding the lower approved investments for the period, ICT-relatedinvestments are expected to generate 17,427 additional jobs in the country. 170percent higher than last year's expected employment of 6,461 jobs from ICT-relatedprojects (='a" I - TableD).

Table DProjected Employment in ICT by ICT sub-industry:

First Quarter 2005 and 2006

Percent toGrowthSub-industry 012005 01 2006 Total Q1Rate2006

Manufacturing 1,631 886 5.1 (45.7)IT Services 4,830 16,541 94.9 242.5

Total 6,461 17,427 100.0 169.7

D. Actual foreign direct investments in the Balance of Payments

1. Fourth Quarter, 2005

The Bangko Sentral ng Pilipinas (BSP) posted a 102 percent higher net inflow ofactual foreign direct investments in the country during the fourth quarter of 2005 (Par:I - able 9ar. As recorded in the balance of payments (BOP), non-residents'investments in the Philippines reached PhP 20.7 billion during the period vis-a-vis thePhP 10.2 billion registered in the same period of last year. The robust growth in othercapital during the fourth quarter of 2005 provided the boost pushing the country'sactual FDI to PhP 20.7 billion level. Both net equity capital and reinvested earningsdeclined, with the lalter suffering bigger decreases compared to last year's yield.

Other capital altained the PhP 15.5 billion level, more than 600 percent larger thanlast year's PhP 2.1 billion. Net equity capital dropped to a net inflow of PhP 5.3billion, 13 percent lower than last year's PhP 6.1 billion. Reinvested earnings

5

Foreign Direct Investment, 01 2006

experienced a turnaround from an inflow of PhP 2.0 billion in the purth quarter of2004, against the net outflow of PhP 109.2 million in the same period in 2005 (Part 1-Figure C and Part II - Table 9a).

Figure CBalance of Payments: Fourth Quarter 2004 and 2005

. II

25.0 - 0 Q4 2004 E Q4 2005

15.5

ReinvestedEarnings

2.0 2.1~_. -

OthelCapital

EquityCapital (net)

20.720.0 -

a. 15.0 -.<=a.<::g 10.0 -:c<:: 5.0 -

0.0Non-

-5.0 - Residents'Investments

2. January to December, 2005

The annual BOP FDls in 2005 exhibited a promising outlook as it reached PhP 62.4billion worth of investments vis-a-vis 2004's performance level of ~hP 38.6 billion,registering a 62 percent increase during the period. The annual growth was attributedto the positive performances of both net equity capital and othe~ capital, whichincreased by 36 and 153 percent, respectively (Par: 1- :::igureDan: Pa ,11- Ta~IE 92).

Figure DBalance of Payments: 2004 and 2005

62.460.0 -

Cl.~Cl.c::.2.c.E

45.0 -

30.0 -

38.6

15.0 -

2004 2005

6

PART II

STATISTICAL TABL '5

Symbols Used

Symbol~pr•

MeaningPreliminaryRevisedLess than half the unit employedZeroNot applicable

Table A

Table B

Table C

Table D

Table 1a

Table 2a

Table 3a

Table 4a

Table 4b

Table 5a

Table 5b

Table 6a

Table 7a

Table Sa

Table 9a

Table 9a.1

Table 9b

LIST OF TABLES

Total Approved Foreign Direct InvestmentsFirst Quarter 2005 and 2006

Projected Employment on Approved Investments by Investment Promotio AgencyFirst Quarter 2005 and 2006

Approved Investments in Information and Communications Technology (ICT) Industryby ICT Sub-industry, Foreign and Filpino NationalsFirst Quarter 2006

Projected Employment in ICT Investments, by ICT Sub-industryFirst Quarter 2005 and 2006

Total Approved Foreign Direct Investments by Promotion AgencyFirst Quarter 2005 to First Quarter 2006

Total Approved Foreign Direct Investments by Country of InvestorFirst Quarter 2005 to First Quarter 2006

Total Approved Foreign Direct Investments by IndustryFirst Quarter 2005 to First Quarter 2006

Projected Employment on Approved InvestmentsFirst Quarter 2005 to First Quarter 2006

Projected Employment on Approved Projects with Foreign InterestFirst Quarter 2005 to First Quarter 2006

Total Approved Investments in the Information andCommunication Technology (ICT) Sector by Promotion AgencyFirst Quarter 2005 to First Quarter 2006

Total Approved Investments in the Information andCommunication Technology (ICT) Sector by Sub-IndustryFirst Quarter 2005 to First Quarter 2006

Total Approved Investments by Promotion AgencyFirst Quarter 2005 to First Quarter 2006

Total Approved Investments by Nationality (foreign and Filipino nationals) ndby Promotion AgencyFirst Quarter 2005 to First Quarter 2006

Total Approved Investments (foreign and Filipino nationals) by IndustryFirst Quarter 2005 to First Quarter 2006

Balance of Payments Foreign Direct InvestmentsFirst Quarter 2004 to Fourth Quarter 2005 (in million Pesos)

Balance of Payments Foreign Direct Investments2004 and 2005 (in million Pesos)

Balance of Payments Foreign Direct InvestmentsFirst Quarter 2004 to Fourth Quarter 2005 (in million US $)

Page

2

4

5

5

7

S

9

10

11

12

13

14

15

16

17

17

18

Table 9b.1

Table 10

Table 11

Balance of Payments Foreign Direct Investments2004 and 2005 (in million US $)

Registered Foreign Direct Investments (SEC and BTRCP)by Country of Investor. First Semester 2002 to Second Semester 2002

Registered Foreign Direct Investments (SEC and BTRCP)by Country of Investor, by Type of Investment,First Semester 2002 to Second Semester 2002

18

19

20Table 12a

Table 13a

Registered Foreign Direct Investments of BSP FDI Firms by Country of InvestorFirst Quarter 2004 to First Quarter 2006

Registered Foreign Direct Investments of BSP FDI Firms by Industry,First Quarter 2004 to First Quarter 2006

21

22

LIST OF FIGURESPage

Figure A Total Approved Foreign Direct InvestmentsFirst Quarter 2005 and 2006

Figure B Approved Investments: Foreign and Filipino NationalsFirst Quarter 2005 and 2006 3

Figure C Balance of Payments Foreign Direct InvestmentsFourth Quarter 2004 and 2005 6

Figure D Balance of Payments Foreign Direct Investments2004 and 2005 6

Figure 1 Total Approved Foreign Direct InvestmentsFirst Quarter 2005 and 2006 7

Figure 2 Total Approved Foreign Direct Investments by Country of InvestorFirst Quarter 2006 B

Figure 3 Total Approved Foreign Direct Investments by Industry,First Quarter 2006 9

Figure 4 Projected Employment on Approved InvestmentsFirst Quarter 2005 and 2006 10

Figure 5 Percent Share of ICT Sector in the Total Approved FDlsby Promotion Agency, First Quarter 2006 12

Figure 6 Percent Share of ICT Sector in the Total Approved FDlsby Sub-Industry, First Quarter 2006 13

Figure 7 Total Approved Investments (foreign and Filipino)First Quarter 2005 and 2006 14

Figure 8 Percent Share of Total Approved Investments (foreign and Filipino)First Quarter 2005 and 2006 15

Figure 9 Total Approved Investments(foreign and Filipino) by IndustryFirst Quarter 2006 16

Table 1a.Total Approved Foreign Direct Investments by Promotion AgencyFirst Quarter 2005 to First Quarter 2006(in million pesos)

Approved FDI Percent to Growth rate

Agency 2005 I 2006 I total Q1 Q1 2005-

Q1 I Q2 I Q3 I Q4 I Total I Q1 2006 Q1 2006

1 Approved Investments refer 10 the project cos: or commitled Investments by FilipinO and foreign investors

2 Details may not add up to totals due to rounding

Sources of Basic Data: Board of Investments lBOI), Philippine EconomIC Zone AuthOrrty (PEZA), Suble Bay Met pOlitan Aumonty (SBMA)

and Clark Development Corporation (CDC)

Figure 1Total approved foreign direct investments:

Q1 2005 and Q1 200663.5

60.0

'"o~ 45.0c.

~ 300:0.~ 15.0

31.5

~-_D__ ~_Q1 2005 Q1 2006

7

Table 2a.Total Approved Foreign Direct Investments by Country of InvestorFirst Quarter 2005 to First Quarter 2006(in million pesos)

Approved FOI Percent to Growth rateCountry 2005 1 2006 total Q1 01 2005.

01 I 02 I 03 I Q4 I Total 1 01 2006 Q1 2006Australia 466.7 92.2 4.1 563.0 77.6 0.1Sr. Vir9in Is. 1755 60.4 249.0 484.8 39.7 0.1 (Ii 4)France 22.5 23.0 45.5Germany 166.2 231.5 0.7 19.1 417.5 1.0 0.0 (et: 4)Hon9 Kon9 2.7 11.3 78.6 92.6 34.9 0.1Indonesia 27 0.0Italy 2.7 4.9 7.7 2.7 0.0 0.0Japan 14,203.4 3,065.8 6,234.4 4,035.4 27,538.9 2,862.3 45 (7S81Korea 9,5748 172.3 769.0 312.3 10,828.4 51,680.5 81.4 439.8Malaysia 18.0 0.2 ' 1.4 49.9 69.4 55.3 0.1 207.8Netherlands 3,009.6 4,029.6 501.5 11,616.9 19,157.6 258.6 0.4 (e'1.~)PROC 1.4 49.9 31.0 112.3 194,6 464.6 0.7 32,592.3Singapore 26.7 88.4 151.5 622.9 889.5 1,370.6 2.2 5,040.5Sweden 0.4Switzerland 817.2 817.2 4.7 0.0Taiwan 354.5 764.5 33.0 241.5 1,393.5 186.1 0.3 lL-:-.5,Thailand 1,533.5 1.5 1.535.1 {10:'.O\UK 11.4 25.2 65.7 92.8 195.1 1.8 00 (oLL)USA 2,175.2 1,759.3 6,302.7 4,675.5 14,912,7 6.380.1 10.0 193.3ManxNauru

Cayman Islane 13,817.2 13.817.2Others 252.3 1,002.9 1,191.8 398.8 2,845.9 63.8 0.1 (IL..!Total 31,505.2 11.746.9 16,203.3 36,351.3 95,806.8 63,486.7 100.0 101.5

Notes'

1. Approved Investments refer to the proJect cos: or committed Investments

2 DetailS may no: add up 10 totals due to rounding

Sources of BaSIC Dale: Board of Investments (BOI), Philippine EconomIC Zone Authority (PEZA). Sub:c Bay MetropOlitan

Authority (SBMA) ana Clark Development Corporation (CDC)

._------Figure 2

Total approved FDls by country of investor.First Quarter 2006

Korea81%

USA10% Japan

5%

__ Others

Singapore 2%2% 8

Table 3a.Total Approved Foreign Direct Investments by IndustryFirst Quarter 2005 to First Quarter 2006(in million pesos)

Approved FDI I Percent to Growth rateIndustry 2005 I 2006 total Q1 Q1 2005-

Q1 I Q2 I Q3 I Q4 I Total I Q11 2006 Q1 2006

Agriculture 33.2 257.2 290.5 ,-I

Mining 225.3 7.087.6 7,312.9 1-Manufacturing 19,759.1 9,258.3 11,226.4 27,486.5 67,730,4 59,598.1 939 201.6

Electricity 10,863.5 10,863,5 r (100.0)

Gas 90.2 90.2

WaterConstruction 20.1 13.9 33.9Trade 0.0 33.2 507 23.3 107.3 1.5 00 4.690.4Transportation 25.4 14.4 299.8 51.9 391.4 3.0 0.0 (85 1)Storage 0.5CommunicationFinance & Real Estate I 8.3 8.0 111.7 75.1 203.1 1€j10 0.3 1.829.3Services 848.9 2,154.5 4,410.4 1,369.4 8,783,1 3.7231 5.9 3386

16,203.3 95,806,8,

Total 31,505.2 11,746.9 36,351.3 63,486.7 100.0 101.5

aJ Includes EconomiC Zone Developmen: and Industnal Part.

Notes

1. ApprOved Investments refer to the prOject cost or committed Investments

2. The services rnoustry inCludes hotel/restaurant businesses. computer software developmenl health care program services, renting and leasing

of waler sport eQUlpment. tramlng serviceS, protectIon/security training course. college edUcation and other servlcel

Sou'ces 0' Bas,c Data Boa,d 0' Investments (BOl). Phi"p",~e ECOhO'",CZone AuthOhty (PEZAi. Sub'c Bay MetmpoLn AuthOnty (SBMA)

and Clan.; De"elopment Corporation (CDC).

Figure 3Total approved FDls by industry,

First Quarter 2006Mfg.

93.9%

ServIceS-- 5.9%

Finance & RealEstate0.3%

Others0.01%

9

Table 4a.Projected Employment on Approved InvestmentsFirst Quarter 2005 to First Quarter 2006

2005 2006 Percent to Growth rateAgency total 01 01 2005-

01 I 02 I 03 I 04r I Total 01 2006 012006BOI 6.017 5.161 15.310 19.861 46,349 5,479 14.4 (8.9)PEZA 12.722 20.366 23.525 15.179 71,792 23.039 60.6 81.1SBMA 1.892 139 2.333 1.752 6,116 7,731 20.3 308.6CDC 246 592 2.184 4,784 7,786 1,750 4.6 611.4

Total 20.877 26,258 43,352 41,556 132,043 37,999 100.0 82.0

(. reVised

Notes

1_ Approved Investments refer to the prOject OO5t or committed investments by Filipino and foretgn Investors.

2. Details may not add up to totals due 10 rounding.

Sources of BasIc Data: Board of Investments (BOI), Phillppme Economi:: Zone Authorrty (PEZA). Sublc Bay Metropohtan

Aurhority (SBMA) and ClarY- Development Corporation (CDC)

Figure 4Projected employment:Q1 2005 and Q1 2006

40,000 -

30.000 -

20,87720,000 -

10,000 -

Q12005

o on Total approved investments

[] on Total approved investmentswith foreign interest---------

37,999

Q12006

10

Table 4b.Projected Employment on Approved Projects with Foreign InterestFirst Quarter 2005 to First Quarter 2006

2005 2006! Percent to Growth rate

Agency total 01 01 2005-01 I 02 I 03 I 04r I Total 01 2006 012006

BOI 3,558 2,497.0 12.208 8,249 26,512.0 . 3,128 9.6 (12.09)PEZA 10,976 19,192.0 20.662 12,190 63,020.0 20.171 62.2 83.8SBMA 1,732 114.0 2,176 1,394 5,416.0 7,701 23.7 344.6CDC 149 577.0 2,033 2.635 5,394.0 1,434 4.4 862.4

Total 16,415 22,380 37,079 24,468 100,342 32,434 100.0 97.6

r. revIsed

NOles

1. Approved Investments refer to tne project cost or commrtted Investments oy Filipino and foreign investors

2 Details may nol add up to totals due to roundIng

Sources of Basic Data: Board of Investments (BOl), PhiliPPine Economic Zone AuttlOrrty (PEZA), Subic Bay Metro IItan

Aurtlonty (SBMA) and ClarK Development Corporation (CDC)

11

Table SaTotal Approved Invesbnents In the Information and Communication Technology(leT) sector by Promotion AgenciesFirst Quarter 2005 to First Quarter 2006(in million pesos)

2005Agency 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter

Total Fili inc. Forei n Total Fili ino. Forei n Total Fili ina" Forei n Total Fili ina. Forei n801 239.7 231.4 6.3 2.D47.2 2.036.5 10.7 887.8 209.6 6782 887.8 209.6 676.2PEZA 5.789.9 137.0 5.652.9 2.210.1 128.9 2.0812 3.860.5 234.0 3.626.5 3.860.5 234.0 3.626.5SBMA 0.7 0.7 0.3 61.0 46.9 14.1 61.0 46.9 14.1CDC 26.4 0.4 26.0 322 17.5 14.7

Total 6,056.7 369.5 5.687.2 4.289.8 2.183.0 2,106.8 4,809.3 490.5 4,318.8 4.809.3 490,5 4,318.8% Share to Total 100.0 6.1 93.9 100.0 50.9 49.1 100.0 10.2 89.8 100.0 102 89.8

N"'~1. A,ppr\:M.'<llnvestrnents r~r to \toe prOject cos: Dr committe-::! l~em:s

:: Cetus may nO! add up ttl tI)l;Ils due to toundll'lg

Sources eft BasIC Data Boai'd O! lnvestmems (BOI), PhillP9ltle'EconolTlC Zone AuthOfty (PEZA). SuOlC Bay MetroDOlltan Autnonty (SBlM),

and tile Clan; De'>'elopment Corporation (CDC)

2006 Growth rate Q1 2005 - Q1Agency 1st Quarter 2006

Total I Filininoall ForeiQn Total I Filioino.'1 ForeianBOI 158.7 158.1 0.6 (Z:.8) (3~.-1 (S2..e,PEZA 2,411.3 842 2.327.1 (55.<' (35.5) (5£.S)SBMA 89.5 0.4 89.0 11.948.7 j4',.i}CDC 895.5 52.7 842.8 3.288.6 12,400.6 3,140.8

Total 3.555.0 295.5 3.259.5 «,.S) 12'.0' I'~-,"_.r .% Share to Total 100.0 8.3 91.7

Figure 5Pen:ent share of leT sector in the total approved Fels by

promotion agency. First Quarter 2006

leT BOt

5.6fi% /~~PEZA

\. 3.8%

SSMA0.1%

Ofhe,Industries94.4%

12

Ta~5bTotal Approved Investments in the Information and Communication Technology(ICT) Sector by Sub-IndustryFirst Quarter 2005 to First Quarter 2006(in mJllion pesos)

o2

2005 ,Subsector 1st Qua~r 2nd Qua~r I 3rd Quarter: I 4th Quarter

rOb' I FIlipino" I ~Ign I rOb' I RUplno" I foreign I r",~ I FlJlplno" foreign I rOb' I Rllpino" I ForeIgn

Manufacturing 5,152.9 121.9 5,031.0 17.2 17.1 . . - 5,B71.1 645.6 5.225.4Trade . - . . . . . . . . . .Telecomm. - . . 2,019.5 - . . . . . .IT Services 903.6 247.6 656.2 2,253.1 146.4 2,106.7 4,B09.3 490.5 4.318.8 1,452.6 364.2 1,088.4

Total 6,056.7 369.5 5,687.2 2,270.3 2,183.0 2,106.8 4,B09.3 490.5 4,318.8 7,323.7 1,009.8 6,313.9.t Share to Total 100.0 6.1 93.9, 100.0 96.2 9 .8 1 0.0 10.2 89.8 100.0 '38 86.2

""'"1 ApproYt"d InYestmet1tS ~r to tt1e project. COS'!or commll1e'd II1V1:"'5tm~nts

2. Deta~s may no: add UD to totalS due to rouoolrlg

SoU~ 01 BasIC Data Eloara 0: tn.ntm~nts (BOI), PhdlpplO~ EconomIC 20M> A.ut1lofty (PEZA), SlJblC Bay Metropolitan Autnonty (SBMA),

and tt1e Clark [)eo.oetopmertt CorporatIOn (eoc)

2006Growth rate Q1 2005 - Q1 2006

Subsector 1st QuarterrOb' I FUlPlno. I Foreign rOb' I FllIplno'" I ForeIgn

Manufacturing 782.0 48.8 733.3 (8<.8) (60.0) (85.')TradeTelecomm.IT Services 2,n3.0 246.7 2.526.3 206.8 10.<) 285.0

Total 3,555.0 295.5 3,259.5 (t':.~) (20.0) ft:.:.'7!% Share to Total 100.0 8.3 91.7

Figure 6Percent share of leT sector in the total approved FDls by sub-

industry, Fim Quarter 2005

Oth.,Industries94.4%

Mfg.1.2%

Services4.4%

13

.:.- -'~.

Table 6a.Total Approved Investments by Promotion AgencyFirst Quarter 2005 to First Quarter 2006(in million pesos)

Approved Investments Percent torate Q1Agency 2005 2006 total Q12005-Q1 Q2 Q3 Q4 Total Q1 2006

BOI 52,604.8 52,276.7 8,357.8 50,639.4 163,878.7 5,557.2 7.6 (S,')PEZA 13,0066 7,824.5 14,809.1 27,121.0 62,761.2 14,519.2 19.9 11.6SBMA 436.3 3.1 592.7 452.3 1,484.4 51,711.6 70.8 11751.9CDC 57.4 210.1 167.2 2,675.5 3,110.1 1,243.0 1.7 2066.7

Total 66,105.1 60,314.4 23,926.7 80,888.3 231,234.5 73,031.1 100.0 10.5

Notes:

1. Approved Investments refer to the project cost or committed investments by Filipino and foreign investors.

2. Details may not add up to totals due to roundi~g.

Sources of Basic Data: Board of Investments (8OQ. Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan

Aurhority (SBMA) and Clark Development Corporation (CDC).

Figure 7Total approved investments (foreign and Filipino):

01 2005 and 01 2006

75.0

'" 60.00

'"'"0. 45.0

~ 30.0:c.,:;

150

66.1I11

012005

73.0

01 2006

14

Table 7a.Total Approved Investments by Nationality (Filipino and Foreign) and by Promotion AgencyFirst Quarter 2005 to First Quarter 2006(in million pesos)

2005Agency 1st Quartrr 2nd Qua Iter 3rd Quartrr 4th Quarter

Total AlIpino" FOt'elgn Total FUlpino" FOt'elgn Total Filipino" foreign Total Filipino"' Foreign

801 52.604.8 33,489.7 19,115,1 52,276,7 46,483.7 5,793,0 8,357.8 2,293,3 6,064.5 50,639.4 37,815,1 12.824.3PEZA 13,006.6 1,015.4 11.991.2 7.824,5 1.967.4 5.857.1 14,809.1 5,091,2 9,717.8 27,121.0 4.844.9 22,276.1SBMA 436.3 69,0 367,3 3.1 '.6 1,5 592.7 226,5 366.1 452.3 348,6 103.7CDC 57.4 25,8 31,6 210.1 114.7 95.4 161.2 112.4 54.6 2.675.5 1,528.3 1,1472

Total 66,105.1 34,599.9 31,505.2 60.314.4 48,567,5 11,746.9 23,926.7 7,723.4 16.203,3 80,888.3 44,537.0 36,351.3% Share to Total 100.0 52.3 47.7 100.0 80,5 19.5 100.0 32.3 67.7 100,0 55.' 44.9

a' lnducles all commll1e'd IlVeStme'ntS of F~lplnos 10Wholly anC!partlally Ot¥ne<it'OITIpames

No<e>

1. ~ IrNeSUllents fe'kof to tl'>ePfOJed COS!or comm~ InY'eStmentS

2 ~ItS may nOIadd up to totals due to tound~

SOurces of Base Data Boaro O'Ilnvestllumts (BOI). Ph'lppcne Ecooomc Zone Autrlor«y (PEZA). Subl: Bay Me:ropollt3n Author1ly (SBMA)

2006Growth rate Q1 2005 ~Q1 2006

Agency 1st QuarterTotal FIlipino"' foreign Total Filipino"' Foreign

BOI 5.557.2 3.1872 2,370.1 (8~.4J (9[';.5) (£:';' .6)PEZA 14.519.2 5,689.5 8.629,7 11.6 460.3 (2£.4)

SBMA 51,711.6 325.8 5',385,8 11,751.9 372,4 13.888.4CDC 1.243,0 341.8 90'2 2.066.7 1.227.4 2.7502

Total 73,031.1 9,544.3 63,486.7 10.5 (7::' to) 101.5% Share to Total 100.0 13.1 86,9

Figure 8Percent share of total approved investments,

foreign and Filipino nationalsQ1 2005 and Q1 2006

Foreogn47.7~.\

01 2005

Fdlp,"o52,3~

01 2006

15

----------- -----~--~-------~~-~~-,~--,.""'"-~

Table 8a.Total Approved Investments (Filipino and Foreign) by IndustryFirst Quarter 2005 to First Quarter 2006

(in million pesos)

Approved Investments Percent to Growth rateIndustry 2005 I 2006 total Q1 Q12005-

Q1 I Q2 I Q3 I Q4 I Total I Q1 2006 Q12006Agriculture 10.8 83.1 676.6 770.5 55.5 0.1 414.8Mining 573-2 29.1 7,691.5 8,293.8Manufacturing 46,157.1 53,236.7 12,415_8 38,351.0 150,160.6 61,924.5 84_8 342Electricity 17,473-5 4,185.8 21,659.4 (; 000)Gas 90.2 178.4 268.6WaterConstruction 52_2 312 83.3 10.0 0.0Trade 117.6 82.9 103.3 53.1 357.0 16.5 0.0 (8S0)Transportation 531.0 16.8 393.7 21,230.7 22,172.2 100.8 0.1 (8~0)Storage 24.8 0.9 26.2 (~0:'a)Communication 2,019.5 60.0 2,079.5Finance & Real Estate &' 377.8 811.5 4,334.3 4,495.9 10,019.5 5,4266 7.4 1336.3Services 1,412.5 3,4385 6,528.6 3,964.3 15,343.9 5,497.3 7.5 289.2

Total 66,105.1 60,314.4 23.926.7 80,888.3 231,234.5 73,031.1 100.0 10.5

a' Includes Economic Zone Development and Industrial Par1o;,

Noles:

1. Approved Investments refer to Ihe project COSIor committed investments.

2. The services induslry includes holel/restaurant businesses: compwer software development. heatlh care program services, renting and leasing

ofwaler sport equipmen:. training services, prolecliontsecurity training course, college education and olher services.

Sources of BasK: Data: Boord of Investments (BDl). Philippine Economic Zone Authority (PEZA). Subic Bay Metropolitan Authority (SBMA)

Figure 9Total approved investments

(foreign & Filipino), First Quarter2006

____ Others

0.3%

16

Table 9aBalance of Payments Foreign Direct Investments '"First Quarter 2004 to Fourl!l Quarter 2005(in million Pesos)

Total

38,563.241,997.27,902,6

, (11.336.7)

2004 ___1-Q2 1--Q3- Q4 II

11,071.7 18,590.2 10,244.321,192.8 12,766.8 6,079.11,118.4 2,183.8 2,026.3

r1'.23S 4\ 3,639.7 2,138.9

Q1{-:.~2,O)1,958.62,574.215.875.8)

Non-Residents'lnvestments in the Phlls.Equity Capital (net)Reinvested Earnings tvOther Capital

aJ Date las! updated. 15 May 2006

b! Data Includes reinvested earnings from Danks only

Note<

~. ExcMnge rate used was based on the average buymg and seIling rale 10f the Quarter. Details may net. add up to totalS ell e to rounding

2 Concepts and CO"Ierageconform generally to the recommendation of the BCMS 'NhlCh was 8ClOpted by tne BSP starting With the 1999 data

Sources of BaSICDa'"..a- Deoal'tment of Econol'mc StatIStiCS (DES), Bangko Sentral ng Pillptnas (BSP)

Table 9a continued •••

Non-Residents' Investments in the Phlls.Equity Capital (net)Reinvested Earnings h'

Other Capital

2005 I Percent to Growth RateTotal 04 01 2004-

01 I 02 I 03 I 04 II Total 2005 01 2005

21,243.1 4,265.3 16,192.1 20,689.7 62,390.1 100.0 102,0

21,0'78.0 9,678.7 20,898.4 5,295.1 56,950.2 91.3 (~2 S

935.6 (32:'.1 , /', .03:'.51 (iO~'2) (511:.2) (:'E iJ: L.

77:- ::' (::.8":'3 r:oss-." 15,503.8 5,950.2 9.5 624.8

Table 9a.1Balance of Payments Foreign Direct Investments .'2004 and 2005(in million Pesos)

Percent toGrowth Rate

2004 2005Total 2005

2004-2005

Non~Residents' Investments in the Phlls. 38,563.2 62,390,1 100.0 61.8Equity Capital (net) 41,997.2 56,950.2 91.3 35,6Reinvested Earnings b/ 7,902.6 (5-:C2 (c.E, (-;~5Other Capital t-:: 23C- 5,950.2 9.5 152.5

a' Date las: u;:lQated 15 May 20DS

b,' Data ,ncluoes reinvested earnIngs from banks only

Notes"

1. Exchange rate used was based on the average bUyIng and seiling rale for the quarter, Details may not aOd up 10totals d 10 rounding

2 Concept'S and coverage confoml generally to the recommendation o~the BPM5 which was adOpted Dy the BSP startlng h tne 1999 oata

17

Sources of Basic Dat2: Department of Economic $".atlSbcs (DES), BangkO Sentral ng PiliptnaS (SSP)

Table ab.Balance of Payments Foreign Direct Investments ~First Quarter 2004 to Fourth Quarter 2005

(in million USS)

20~

01 Q2 I 03 I Q4 I Total

Non~esidents'lnvestments in the Phils. (2<.0) 198.0 332.0 182.0 688.0Equity Capital (net) 35.0 379.0 228.0 108.0 750.0Reinvested Earnings h' 45.0 20.0 39.0 36.0 141.0Other Capital (105.01 (2~'Lm 65.0 380 (203.0)

bI Data locluoes reinvested earnings !rom bankS onty

NOles:

1. Exchange rate used was based on the average bU)'lng and seiling rate for the Quarter. Details may no: add up to totals due to roundIng

2. Concepts and cove~ conform generally to the recommenoalton of the BOM5 which was aooPted by the BSP starting WIth the 1999 aata

Sources of Basi::: Data De-pa:1ment of EconomIC Statlstl~ (O:::S), BangkO 5enl-a1 ng Pilipinas (SSP)

Table 9b continued .••

2005 Percent to Growth RateTotal Q4 Q4 2004-

01 I Q2 I 03 I Q4 I Total 2005 Q4 2005

Non-Residents' Investments in the Phils. 388.0 78.0 289.0 379.0 1.132.0 100.0 108.2Equity Capital (net) 383.0 In.O 373.0 97.0 1.030.0 91.0 ,~c.:Reinvested Earnings Il' 17.0 r~0 'n:.J, ::.0,1 (~.J f:,.= (iC5,E:Other Capital (1-4 0, i::': '.11 {E::2- 284.0 111.0 9.8 647.<

Table 9b.1Balance of Payments Foreign Direct Investments "2004 and 2005(in million US$)

Percent toGrowth Rate

2004 2005 Tolal2005 2004-2005

Non-Residents'lnvestments in the Phils. 888.0 1.132.0 100.0 6<.5Equity Capital (net) 750.0 1.0300 91.0 37.3Reinvested Earnings b/ 141.0 (" 0 (' p i~O~")~"Other Capital (:?C~0, 1110 9.8 15<.7

b.I Data lnclUClesreinvested earnings from bankS only

NOles

, Exchange tate used was based on the average buYll'"(l and seIling rale for the cuarter Details may no: aod UPto totals cue to rounding

2. Concepts ana covern;}E! conform generally 10the recommenoatlon of tne BPPl.5 wtllcl1 was adopted by the BSP starting WlttI the 1999 Data

Sources d BaSICData Department of EconomIC StatIStiCS (DES), BangKo Serrtral r'IQ Pillptnas (BSP) 18

Table 10.Registered Foreign Direct Investments (SEC and BTRCP) by Country of Investor2002(in million pesos)

Nationality 1======H=l======2002

H2 Total

AustraliaBelgiumBermudaBr Virgin IsCanadaFranceGermanyHKIndiaIndonesiaJapanKoreaMalaysiaNetherlandsPROCSingaporeSwitzerlandTaiwanThailandUKUSAOthers

Total

44.1

23.2150.7

1.278.8143.768.2

5.5133.410.538.5

54.7106.5386.9

2,444.8

10.4

15.8

2.1

47.2143.4

2.3

19.4

72.426.565.2

405.0

54.5

15.8

25.3150.7

1,326.0287.068.3

•5.6

135.710.657.9

•127.1133.0452.2

2,849.8

a' Data lor 2002 are still preliminary; Quarterly data for 2003, 2004 anc 2005 are not ye~ available.

Note:1. SEC data includes new and additional investments in domestic stock corporations and partnerships, by nationality of investor

2. Details may no: add up to totals due to rounding. ISources of Basic Data: Securities and EXChange Commission (SEC) and Bureau of Trade Regulation and Consumer Protection (BTRCP)

19

Table 11.

Registered Foreign Direct Investments (SEC and BTRCP) by Country of Investor, by Type of Investment2002(in million pesos)

2002Country Hl I H2 I Annual

New I Additional I Total I New I Additional I Total I New TAdditional I Total

Australia 44.1 44.1 10.4 10.4 54.5 54.5BelgiumBermudaBr Virgin IsCanada 15.8 15.8 15.8 15.8FranceGermany 23.2 23.2 2.1 2.1 25.3 25.3HK 150.7 150.7 150.7 150.7IndiaIndonesiaJapan 1,278.8 1,278.8 47.2 47.2 1,326.0 1,326.0Korea 143.7 143.7 143.4 143.4 287.0 287.0Malaysia 68.2 68.2 68.3 68.3NetherlandsPROC 5.5 5.5 5.6 5.6Singapore 133.4 133.4 2.3 2.3 135.7 135.7Switzerland 10.5 10.5 10.6 10.6Taiwan 38.5 38.5 19.4 19.4 57.9 57.9ThailandUK 54.7 54.7 72.4 72.4 127.1 127.1USA 106.5 106.5 26.5 26.5 133.0 133.0Others 386.9 386.9 65.2 65.2 452.2 452.2Total 2,444.8 2,444.8 405.0 405.0 2,849.8 2,849.8

aJ Dala for 2002 still prelimmary; quarterly dala for 2003. 20er-: and 2005 are no: yet availabie.

Note:

i. SEC data includes new and additional investments in domesbc stock corporalions and partnerships. by nationality of investor2. Details may not add up 10 totals due to rounding.

Sources of Basic Data: Securities and Exchange CommisSion (SEC) and Bureau of Trade Regulation and Consumer Prolection (BTRCP)

20

he recording penoos

and coverage between BOP and 10:> FDI reports WIth additIonal ceweraDE' on otner forms of eQuity contnbutlon suen as contingency SUllllus

of Insurance compantes and stock dIVidend shares a:x:rUlng to prevJousty registered foreign mvestmerrrs WhlctllS mcluoe(l only In subject dataset

and not In BOP.

Table 120.Registered Foreign Direct Investments of SSP FDI Firms by Country of Investor

First Quarter 2006 to First Quarter 2006

(in million pesos)

2005 2006 Percent Growth rate

Countryto total Q12005-

Q1 I Q2 T Q3 I Q4 I Total Q1 Q12006 Q12006

Australia 154.9 - - 42.0 196.9 . 0.0 ."

Belgium - . - - 0.0 0.2 0.3 ...

Bermuda - . - - 0.0 - 0.0 ...BrVirgin Is 3.0 - 50.7 - 53.7 0.2 0.3 [92.5)

Canada - 0.4 20.0 - 20.4 0.2 0.3 ...

Cayman 50.0 - 3.996.5 47.5 4,094.1 19.0 27.5 (CZ.11

France 231.4 - 676.8 - 908.2 0.0 0.0 (100.0)

Gennany 21.1 77.8 130.4 - 229.2 - 0.0 ...

HK - - - - 0.0 3.3 4.8 ...

India - - 0.4 - 0.4 0.2 0.3 .. '

Indonesia - - - - - 10.9 15.8 .. '

Japan 103.9 6.533.6 26.4 85.6 6,749.5 - 0.0 ...

Korea 18.5 - 23.0 11.2 52.6 - 0.0 ...

Malaysia - 11.0 - 13.5 24.5 - 0.0 ...

Netherlands 271.2 182.2 2.456.0 22.3 2,931.7 7.1 10.3 (9,.41

PROC - - - - 0.0 - 0.0 .. '

Singapore 2.816.5 337,4 195.0 44.2 3,393.1 1.6 2.3 (9L~!

Switzerland 65.8 - - - 65.8 0.6 0.8 (9£02\

Taiwan - 100.0 175.2 3.9 279.1 - 0.0 ...

Thailand 1.6 2.968.9 26.2 - 2,996.8 - 0.0 ...

UK 0.4 448.1 18.5 15.1 482.1 9.2 13.4 2,193.7

USA 330.8 85.6 1.558.3 82.7 2,057.4 64 9.2 [9Ui

Others 1.5 4.249.5 2.8 15.3 4,269.1 10.0 14.5 545.9

Total 4.070.7 14,994.4 9,356.2 383.3 28.804.6 68.9 100.0 19<.31

Notes-1. ThIS ISassumed to be pari. of the tOlal repOned actual Investments In the BSP.SQP (lable 9.). att.hough there ate differen~ In t

2 Details may mX add UPto to"a~ oue 10 roundln~

Source of BaSICData International Operatrons Department (100) • BangKo Senlral n9 Piliptnas (BSP)

21

Table 130.Registered Foreign Direc1lnveslmenls 01 BSP FDI Finns by IndustryFirst Quarter 2005 to First Quarter 2006(in million pesos)

2005 2006 Percent toGrowth rate

Industrylotal Ql 2006 Q12005.

Ql I Q2 I Q3 I Q4 I Total Ql Q12006

Agriculture & Fishery 64.4 64.4 2.54 3.7Mining 0.20 0.3Manufacturing 176.2 9.598.1 654.9 75.9 10.705.1 14.68 21.3 (91.7)Water & Electricity 10.9 10.9 2.19 3.2Construction 47.4 1.920.5 8.9 1.976.8 16.36 23.8 (65.51Trade 781.4 432.4 747.0 81.6 2.1)42.4 10.35 15.0 (9£.7)Transportation 2.6 10.3 17.7 30.5 0.20 0.3 ISZ.3)Cornnunication 13.2 I 1.3 12.3 36.7 12.93 18.6Finance & Real Estate 4.890.7 5.630.1 137.8 10,658.7 6.12 I 1.8Services 1/ 3,063.1 46.5 110.3 55.6 3,277.7 1.29 1.9 1100.01others 2J 1.• 1.4Total 4.070.7 14,994.4 9.356.2 383.3 28.81)4.6 68.9 100.0 19L.31

11 Refers to hotevrestaurant bUSinesses, entertamment, community and recrealtona!, mec!tcal. educatlOl'lal seMces. erc

2J Aetrvrtres no: adeQuately defined

NOlesThiS ISassumed to be part of the total reponed actuallnvesrments In the SSP-BOD (Table 9.). altnou:J~ there are differen::es

In tne recorc:llng penoos and coverage between BOP and 100 FOI reports with a::ldrtlonal coverage on other forms Of

eQuity contnbutlQrl SUCh as contingency surplus of Insurance compantes and stock dMdend shares accruing to

PreYlOUsly regtStered foreign Investments wttich is Included only In subJeC-data~ and not In Bap

2 Detalls may rnx ad:! up to lotals due to roundmg

Source of Basic Date: InternatIonal Qoefatlons Department (IO:J) - Bangko 5el"llrai nOiPihplnas (BSP).

22

ANNEXES

ANNEXA

Technical Notes

Concepts/Coverage

1. One of the objectives of the FilS is to develop a system that is comparableinternationally. As such, the Philippine FilS is adopting the International Monetary Fund(IMF) concept of Foreign Direct Investments as described in the F fth Edition of theBalance of Payments (BOP) Manual, in all of its components, i.e., the Register, theAnnual FDI Reporting System and the Consolidated Quarterly Reporting Systern.

2. Foreign Direct Investments (FDI) as defined in the BOP Manua, are investmentsmade to acquire a lasting interest by a resident entity in one econon]y in an enterpriseresident in another economy. The purpose of the investor is to ~ave a significantinfluence, an effective voice in the management of the enterprise. To operationalize thisdefinition, the FilS followed the benchmark definition of the Organiza'tion for EconomicCooperation and Development (OECD) which considers as di:rect investmententerprise an incorporated or unincorporated enterprise in which a direct investor whois resident in another economy owns ten percent or more of the drdinary shares orvoting power (for incorporated enterprise) or the equivalent (for ~n unincorporatedenterprise). The ten percent cut-off in equity is used to distinguish b~tween direct andportfolio investments, which is not covered by the FilS at present. I3. Since the Philippines is more of a recipient of foreign investments, the FilS coversonly inward foreign direct investments. Specifically, this includes foreign directinvestments in Philippine corporations, partnerships and single proprietorships.

4. Foreign direct investment flows refer to the new or additional investments paidby a foreign entity to a resident enterprise in another country during the period. In thecase of the Philippines, this covers: capital or equity contributions remittances fromabroad, reinvested earnings, technical fees and royalties converted to ~quity, bonds andother debts converted to equity and imports converted to equity. Specifically, the CQRSwill report on approved FDI flows, registered FDI flows and the bala~ce of payments(BOP) FDI flows.

5. Approved foreign direct investments represent the amoant of proposedcontribution or share of foreigners to various projects in the country las approved andregistered by the BOI, the PEZA, the SBMA and the CDC. Approved foreigninvestments do not represent actual investments generated b~t rather foreigninvestment commitments which may come in the near future. This consists of equity,loans and reinvested earnings. In the operationalization of compJting for approvedFDls as approved and registered with the Investment Promotion Ag'encies (IPAs), allFDls including those with less than 10 percent of the ordinary shares are included. Thereason is that approved FDls as rendered by the IPAs have long lasting interest unlikeportfolio investments.

6. Approved FDls in the Information and Communication Tec nology Sector(ICT) includes investment commitments in the manufacturing of IICT equipments,spare parts and accessories including professional, medical and scientificinstruments as well as ICT services e.g., wholesale trade of cOrT)puters,electronicparts and equipments; telecommunications; renting of computers and other office

equipments; computer services and other related activities.

7. Registered FDls only represent foreign equity investments or paid up capital anddoes not include intercompany loans. Hence, not all approved FDls are translated intoregistered FDls since the former consist of intercompany loans and reinvestedearnings. In addition, capital infiows from approved FDls are spread or expected to befully implemented after five years or more, based on the experience of investmentpromotion agencies.

8. On the other hand, the BOP FDls cover cash transactions on foreign directinvestment fiows that are coursed through the banking system. Machinery,equipment and reinvested earnings, which are not cash transactions are included if dataare available.

Methodology and Sources of Data

1. The NSCB as the agency that coordinates all statistical matters in government hasbeen tasked by the IAC-FDIS with the preparation of the CORSo The CORS coversactual and approved foreign direct investments.

2. The investment promotion agencies generate data on foreign investmentsmonthly. These agencies show "project cost" in refiecting approved or committedinvestments. For purposes of the CORS, the term approved investments is adopted. Notall of approved investments will materialize during the period. There is a gestationperiod between approval and actual investments.

3. To arrive at total approved investments, the reported project costs of BOI, PEZA,SBMA and CDC are summed up for the quarter.

4. Total balance of payments foreign direct investments is obtained from the Balanceof Payments (BOP) tables compiled monthly by the BSP. The BOP provides the dataframework on all external transactions of the national economy, in which FDI is oneitem. Conceptually, the FDI flows in the BOP are consistent with the IMF definition.Hence, these are taken as the global total of foreign investments inflow on a quarterlybasis.

5. The SEC and BTRCP also report monthly foreign capital investments. SEC comesup with data on investments and number of non-FIA registered FDI corporations(foreign ownership is less than 40 percent) and FIA-registered corporations (40percent and over foreign ownership), by country of investor and by industry. In the SEC,foreign investments refer to the foreign equity (paid-up) capital of the non-FIA and FIAregistered corporations. It should be noted, however, that registration with SEC andBTRCP does not translate into actual flows as captured by the BOP of the BSP.

6. Hence, what are not reported at present are additional investments of existing FDIenterprises. SEC covers only that portion of existing FDI enterprises that apply foradditional authorized capitalization.

7. The International Operations Department (laD) of the BSP registers foreign directinvestments in cash or in kind in any enterprise organized or existing under the laws ofthe Philippines. Registration of foreign investments with BSP is not mandatory but itgives foreign investors the authority to source foreign exchange from the local bankingsystem to service capital repatriation and cash dividends/profits and other earningsaccruing to BSP-registered investments. As there is currently no mandatory period

within which to register these investments, there is a time lag betwe n the registrationwith the BSP and the inflow of the investment funds or in the case of i vestment in kind,the receipt by investee firm of said investment. In some cases, this ti e lag could be ayear or longer.

8. Total approved investments include all Filipino and foreign inve ments which hasbeen granted approval by the promotion agencies, i.e., BOI, PEZA, C 'C and SBMA.

9. Due to the cut-off periods on data processing adopted in the reparation of thisreport, revisions for the preceding quarters may be done in each issue

ANNEX B

The Foreign Investments Information System

The Foreign Investments Information System (FilS) was started in 1991 as a project ,_,to develop an integrated approach for generating and reporting foreign directinvestments (FDI) in the Philippines.

Statistics on FDls are being reported/generated by a number of agencies that carry outfunctions relating to management and monitoring of and/or promotion for attractingforeign investments in the country, which has often resulted in inconsistent datageneration and interpretation because of differences in concepts, definitions andreporting periods adopted by the concerned agencies.

With the objective of resolving this problem and other issues in the generation andreporting of foreign investment statistics, the National Statistical Coordination Board(NSCB) created An ad hoc Inter-Agency Group (lAG) in 1991 to conduct a study for theimplementation of the FilS.

The lAG publiShed its First Report of the FilS Study in July 1996 based on availableannual administrative data for 1991 and 1992. The report also recommended a systemthat will operationalize the concepts and methodologies for developing and compilingforeign direct investment statistics in the Philippines context. The report featured theresults of the 1991-1992 estimates of stock of FDI, and the concepts, methodology,data system and institutional support needed to implement the FilS.

Based on the recommendation'in the FilS Study, the NSCB created the Inter-AgencyCommittee on Foreign Direct Investments Statistics (IAC-FDIS) in September 1996through NSCB Memorandum Order No. 1-96 to rationalize and integrate foreigninvestments data in all aspects including collection, processing and dissemination. TheIAC-FDIS is now composed of:

NSCBBoard of Investments (BOI)Bangko Sentral ng Pilipinas (BSP)Securities and Exchange Commission (SEC)Bureau of Trade Regulation & Consumer

Protection (BTRCP)Philippine Economic Zone Authority (PEZA)Subic Bay Metropolitan Authority (SBMA)Clark Development Corporation (CDC)National Economic and Development

Authority (NEDA)National Statistics Office (NSO).

ChairCo-ChairMemberMember

MemberMemberMemberMember

MemberMember

IJ

The member agencies of the IACFDIS jointly implement the institutionalization ofthe FilS. The IACFDIS is currently implementing the second component of the

Initial funding came from cooperating agencies, Le., l"SCB, BOl, BSP, SEC and BTRCP. USAIDfunded the project starting in 1993.

FIIS. the Consolidated Quarterly Reporting System (CQRS), which has beenproducing the quarterly Reports on Foreign Direct Investmer\ts in the Philippinessince 1997. The CQRS operationalizes the integration and Iuniform reporting ofquarterly data on foreign investment reported by the various concerned agencies.The quarterly Report on Foreign Direct Investments in the Philippines, which isapproved by the IACFDIS, is released to the public upor\ submission to thePresident of the Philippines sixty days after the reference quarter.

Consolidated Quarterly Reporting System

Qu."_"y R.ponon For.III'"Oi-.cl

Inv•• l•.•••nb,---~ ••.

---4" p~ @ coc If sa.A /

FnrAinn InVA~lmAnlSI;lli~li~

ForeignInvestmentStatistics

The other two components of the FilS are the Registry of Firms on ForeignInvestments and the Annual Reporting System. These three components will laterbe integrated to complete the FilS.

/'~-, .'

',', l"~" ,

"".\

::. ',<":;'1, \.i,~.....:;"\

, !

.. --- -. .-" :OJ''-..•....••.•..•.-----,'". National Statistical Coordination Board

Economic Indicators and Satellite Accounts DivisionEconomic Statistics Office

Romulo A. VirolaSecretary General

Estrella V, DomingoAssistant Secretary General

Raymundo J. TalentoDirector

Economic Statistics Office

Luzviminda S. MitraOIC-Chief, EISAD

Josephine p, FerreChristopher Ivo S. Bacani

Sector Specialists