FDI inflows up 10.6% to $917M in 1st half
By Michelle V. RemoPhilippine Daily Inquirer
MANILA, Philippines—The Philippines enjoyed a higher net inflow of foreign direct investments in the first half of the year, the Bangko Sentral ng Pilipinas said.
The regulator said this was due to the positive sentiment of foreign fund owners on the Philippines.
“Investor sentiment was buoyed by the country’s sound macroeconomic fundamentals, such as the subdued inflation environment, strong fiscal performance, and favorable external payments position,” the BSP said in a statement.
Net inflow of FDIs reached $917 million in the first half, up by 10.6 percent from the $829 million of the same period last year, data from the central bank showed.
Gross inflow of FDIs amounted to $1.06 billion, while outflows were recorded at $145 million.
Monetary officials have expressed confidence that the Philippines will enjoy even higher FDIs over the medium term as the country’s improving fundamentals have put it on the radar screen of more foreign investors.
In June alone, net inflow of FDIs hit $73 million, up by nearly 16 percent from $63 million in the same month last year.
Gross inflow of FDIs during the month amounted to $113 million, while outflows settled at $40 million.
In the first semester, the Philippine economy, measured in terms of gross domestic product, grew by 6.1 percent from a year ago.
Officials said the economy’s performance in the first semester kept the government’s full-year growth target of 5 to 6 percent well within reach.
Growth of the economy in the first half was credited to higher government spending and improved export revenues.
BSP officials earlier said that it was only a matter of time before the Philippines could carve up a major chunk of FDIs flowing to Southeast Asia.
Once the country gets an investment grade—something officials expect to happen within a year or two—the Philippines may enjoy a surge in FDIs.
In the meantime, the Philippines may continue to lag behind most of its emerging market neighbors as far as cornering FDIs is concerned.
While gross inflow of FDI to the Philippines was just about $1 billion in the first half, those that went to Indonesia reached about $11 billion in the same period. FDIs to Malaysia have already reached nearly $11 billion in the first seven months.
Economists said the Philippine would need to address problems, including insufficient infrastructure, tedious process in setting up a business, and high power cost, among others, to better compete with its neighbors in terms of attracting FDIs.
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Tags: Business , foreign direct investments , Philippines
