PH seen to sustain rise in FDIs
The Philippines is expected to attract more foreign investors, particularly those who are willing to stay for the long haul, as the local economy continues to grow despite challenges abroad.
Bangko Sentral ng Pilipinas (BSP) Deputy Governor Diwa C. Guinigundo said the growth in foreign direct investments (FDI) seen in January of the year would likely be sustained in the coming months.
“I don’t see any reason why not. Investments came in and, in fact, that was during challenging times when we saw portfolio outflows due to the US Fed’s actions,” he told reporters late Tuesday.
“Nonetheless, the more durable and permanent type of investments came in, and in a big way,” Guinigundo said.
Latest data from the BSP showed that long-term investments in the country rose by 5.3 percent to over $1 billion in January.
Foreign direct investments come in the form of multinationals lending money or keeping profits with their Philippine subsidiaries, as well as new investments in the country for the purchase of new equipment and construction of facilities.
Also in January, there was a net outflow of foreign portfolio investments or placements in Philippine equity, debt, deposit securities. Net outflows of portfolio investments, or “hot money,” reached $1.84 billion during the month, a reversal from the $1.27 billion in net inflows registered in the same month the year before.
Guinigundo said the entry of FDIs in January, despite the negative sentiment, showed more serious investors were still willing to put their money in the Philippines, confident of the country’s prospects.
“We would expect the same confidence would be maintained and investors would continue to come in. We have a lot to offer,” the central bank official said.
Recently, senior government officials have been expressing upbeat sentiments over the Philippine economy’s prospects in 2014. Gil Beltran, chief economist of the Finance department, said growth could have topped 7 percent in the first quarter of the year, recovering from the slight dip to 6.5 percent in the fourth quarter of 2013.
BSP Governor Amando M. Tetangco Jr. in a similar statement said most leading indicators pointed to sustained growth in the first quarter of the year. Paolo G. Montecillo