More long-term investments are expected to flow into the Philippines this year after 2013’s record-setting pace.
The Bangko Sentral ng Pilipinas (BSP) said economic managers were set to raise the government’s forecasts on foreign direct investments (FDI) for 2014, given the encouraging results for last year.
This follows a BSP report this week showing that net inflows of FDIs rose by 20 percent to a record $3.86 billion last year.
Data showed that gross investments in 2013 reached a record high of P28.4 billion—the highest since 1999—outpacing the $18.5 billion posted in 2012.
This year, the government’s official forecast for FDIs is a net inflow of $2.6 billion.
“We’re looking at higher FDIs for 2014,” BSP Deputy Governor Diwa C. Guinigundo said Tuesday.
He declined to mention an actual figure, but noted that several “push and pull” factors were playing in the country’s favor and would likely lead to higher investments.
On the “push” side, he said the continued recovery of the global economy may result in more multinationals expanding their operations, which could include investments in emerging markets like the Philippines.
Guinigundo cited the usual suspects as “pull” factors that make the Philippines an attractive investment destination.
“We continue to grow. Inflation is stable, we have a good external payments position, fiscal position continues to improve, the banking system is sound and stable, structural reforms are being put in place,” he added.
Apart from record-high foreign direct investments, the country also attracted a record net inflow of foreign portfolio investments or “hot money,” which refers to foreign placements in stocks, government IOUs and bank deposits.
“Hot money” net inflow stood at $4.2 billion last year, an 8 percent increase year-on-year. The final figure for 2013 was also better than the $3.2 billion in inflows projected by the BSP.