SUBIC BAY FREEPORT -A study of the ongoing impact of the global financial crisis on foreign direct investments (FDIs) in Asia, particularly the Philippines, has shown the resiliency of the Subic Bay Freeport as an investment location.

In a presentation prepared by Nomura Research Institute (NRI) for the Japan International Cooperation Agency (JICA), it was observed that the Philippines, like other Asian countries, is reeling from a decrease in FDI commitments due to the economic slowdown.

However, it was noted that the Subic Bay Metropolitan Authority (SBMA), which manages the Subic free port, has reported a 13.6 percent increase in committed investments based on year-on-year figures for the first quarter of 2009. This made the SBMA the only investment promotion agency (IPA) in the country that turned out a positive figure.

According to the first version of the NRI study, which was dated June 2009, FDI commitments secured by the SBMA for the first quarter amounted to P1.5 billion.

On the other hand, all of the other Philippine IPAs reported a year-on-year decrease in commitments for the same period, the NRI said.

These included the Board of Investments (BOI), which recorded a 57 percent decrease to P4.3 billion; the Philippine Economic Zone Authority (PEZA), with a 50.8 percent decrease to P13.6 billion; and the Clark Development Corporation (CDC), with a 72.5 percent decrease in commitment basis.

The figures on FDI commitments in the Philippines formed part of a study by the NRI for the proposed development of the Philippine Investments Promotion Plan (PIPP).

The PIPP seeks, among others, the creation of an inter-agency body "to oversee the implementation and monitoring of all programs, activities and projects to improve investment climate" in the country.

The network of IPAs, including the SBMA, "is tasked with formulating and developing strategies to position the Philippines as among the prime investment destinations in Asia", the NRI said.

The same study pointed to the negative impact on FDI generation in other Asian countries. These included Thailand, which posted a 26 percent decrease in capital commitments; Vietnam, with a 67 percent decrease in capital realization; India, with 28 percent decrease in FDI realization; and even China, which suffered a 21 percent decrease in FDI realization.

Compared with its Southeast Asian neighbors, however, the Philippines "has attracted far less FDI than the peer Asean countries," the NRI study found out.

Earlier, the SBMA has announced that the Subic Bay Freeport has "achieved an excellent level of economic resiliency" after recording a 13.6 percent growth in investments in the first quarter of 2009 despite the global economic crisis.

According to SBMA Administrator Armand Arreza, the agency signed up a total of 30 new projects worth P1.5 billion for the first quarter this year, bringing to 966 the total number of registered investors here. The new projects, meanwhile, are expected to generate some 580 new jobs.

Subic's investment generation this year was recently boosted further by new investment pledges by South Korean shipbuilder Hanjin, which bared new capital infusions worth a total of $86 million.

Hanjin officials said the new investments would be for the production of ship components at the Subic facility and would be committed in two parts: $29 million starting September this year, and $57 million next year and onwards.

Arreza said the growth in investments here was made possible by a self-sustaining business environment created in Subic over the years by the SBMA that was directed towards various industries that require less dependence on foreign markets.

He added that among the industries that kept the local economy afloat was tourism, which has become a major economic driver for Subic Bay, and which has also created various downstream businesses that benefited communities in the Subic Bay area. (30)