Investor Presentaiton
II.
other investment promotion agencies (IPAs) while country of residence (non-Philippine
resident) is the criteria being used by the BSP and the PSA for FDIs.
The population frames across agencies also differ. The BSP data would cover only
foreign direct investment enterprises as defined by BPM6. For the BOI and other IPAs, their
coverage would be only those business enterprises that applied for incentives. For the SEC,
it would be only the SEC-registered corporations, and for the PSA, all business enterprises in
the Philippines including the unincorporated enterprises.
MEASURING THE IMPORTANCE OF INVESTMENTS TO THE PHILIPPINE
ECONOMY
For the past five years (2016-2020), the share of gross fixed capital formation (GFCF)
to GDP increased to 25 percent compared to 20 percent for the period 2011-2015. This
jump in GFCF indicates higher production capacity which could translate to more robust
business activities amidst the country's recovery from the Covid 19 pandemic.
The National Economic and Development Authority (NEDA) launched the AmBisyon
Natin 2040 which envisions the Philippines as a prosperous, predominantly middle class
society. According to NEDA, to accomplish this, per capita income must increase by at least
three times in 25 years until 2040 (beginning 2015)¹.
Table 2. Estimated Number of Times GDP and Its Components Expanded for the period
1995-2020 and Estimated Target Annual GDP and Gross Domestic Capital Formation
Growth Rates to Attain AmBisyon 2040
For the periods indicated at 2018 Constant Prices
1990-2015
(2015 relative to
1990)
Annual Growth Rate (%)
2015-2040
Total
Per Capita
GDP (Y)
3.0
1.8
5.7
Consumption (C)
3.0
1.9
Gross domestic capital formation (I)
3.6
2.2
5.7
Government Expenditure (G)
2.7
1.6
Exports (X)
4.6
2.8
Imports (M)
5.1
3.1
Note: All figures above were computed based on a 10-year moving average of the raw
data.
Using the ten-year moving average of GDP by expenditure component, from 1981-2020
the number of times the economy expanded for the past 25-year period from 1990-2015 were
computed. It was found that total GDP tripled and gross domestic capital formation (GDCF)
expanded 3.6 times. However, the per capita growth rates of GDP and GDCF expanded only
by 1.8 times and 2.2 times, respectively for the same period. Based on a 300 percent growth
target per capita by 2040, the target total and per capita GDP by 2040 were computed at
1 Ambisyon Natin 2040 could simply be referred to as "Ambisyon" in the succeeding usage (as referred to by
NEDA http://neda.rdc2.gov.ph/
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