MACROECONOMIC CONDITIONS in the Philippines are favorable enough to help the country attract more foreign direct investments over the short to medium term, according to ING Bank.
In a forum Wednesday, ING Bank country manager for the Philippines Consuelo Garcia said foreign direct investments should gradually rise as multinational firms start noticing economic improvements and governance reforms in the country.
“Stars are aligned for companies that are thinking of investing and expanding in the Philippines. There is sufficient liquidity in the banking sector, interest rates and inflation … are low, and the exchange rate remains manageable,” Garcia said in a CFO forum held Wednesday in Makati City.
The forum, jointly conducted by ING, Financial Executives of the Philippines (Finex), and the Economic Journalists Association of the Philippines (EJAP), served as a prelude to the 2011 CFO of the Year Award to be held in November.
According to Garcia, substantial liquidity in the banking sector will allow banks to lend more to businesses that are set to embark on big-ticket investment initiatives. Low interest rates and benign inflation, which help keep costs of firms low, may also help attract investors to do business in the country.
ING is willing to provide financing to private companies that are willing to invest in public infrastructure projects being pushed by the government, Garcia added.
The country has what investors are looking for, said SM Investments Corp. chief finance officer (CFO) Jose Sio. All the country needs is to work on its image before investors.
Sio, winner of the 2009 ING-Finex CFO of the year award, said the Philippines should take advantage of the fact that foreign investors are starting to recognize the country as an investment site.
To make foreign businesses actually invest more in the country, he said, the Philippines should complement sound macroeconomic fundamentals with infrastructure investments and efforts to further improve businessmen’s perception of the country.
“Now is the right time for the Philippines to shine. People are now looking at the Philippines because of improved governance and efforts to level the playing field among investors. We should take advantage of this,” Sio said.
The Bangko Sentral ng Pilipinas on Tuesday reported that net inflow of foreign direct investments amounted to $779 million in the first half of the year—up by 16.4 percent from $669 million seen in the same period last year.
Monetary officials said the rise in FDIs was a welcome development.