London-based Capital Economics sees the Philippines remaining a laggard in the region in terms of attracting foreign direct investments (FDI) due to political uncertainties.
“There are signs that the election of President Duterte in the Philippines is scaring off foreign investors and the situation is unlikely to improve when he is gone. The country has a poor history when it comes to electing competent governments,” Capital Economics said in its Long-Term Global Economic Outlook report for 2019.
However, this report came a day after the government reported an increase in foreign investment pledges as of end-September.
Based on the latest Philippine Statistics Authority (PSA) data, total foreign investment approvals by the country’s seven investment promotion agencies (IPAs) from January to September rose 8.2 percent year-on-year to P91 billion.
The latest Bangko Sentral ng Pilipinas (BSP) data, meanwhile, showed actual FDI inflows jumped 31 percent to $7.4 billion as of August, such that economic managers were expecting this year’s haul to breach the record $10 billion posted last year.
But the Asean Investment Report 2018 report showed that actual FDI inflows to the Philippines in 2017 were dwarfed by Singapore’s $62 billion, Indonesia’s $23.1 billion, as well as Vietnam’s $14.1 billion.
Malaysia and Thailand were behind the Philippines with $9.4 billion and $9.1 billion in FDI last year, respectively, although these two countries had higher cumulative inflows from 2010 to 2017.
Economic managers were nonetheless bullish about FDI prospects moving forward as the government further liberalized investment sectors under the 11th Foreign Investment Negative List issued by the President last month, coupled with the recently signed Ease of Doing Business Law , which was seen attracting more foreign capital into the country.