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The Missing Link: Capturing the Realization of Investments Commitments


This discussion paper aims to answer a perennial question, “are investment pledges being realized?” The findings of the study are indicative of investment realization. Specifically, the time series analysis reveals a bidirectional Granger-causal relationship between approved investments and gross foreign direct investment (FDI) inflows over two-year and four-year lag lengths, signifying that increases in approved investments often lead to higher FDI inflows, while strong FDI can encourage additional approved investments. Further, the descriptive analysis of firm-level data from the Fiscal Incentives Review Board shows that most firms are able to meet their investment commitments and commence operations within a year of registration. However, limitations in the current data underscore the need for more robust statistical systems to provide a definitive answer, including the operationalization of the integrated Investment Statistical Framework. This paper recommends ensuring adequate and continued funding for the implementation of the Statistical Development Programs outlined in the Philippine Statistical Development Program 2023-2029, especially under its investment chapter. Further, ensuring that laws incorporate provisions on data collection and analysis will enhance evidence-based policy formulation.


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