Foreign direct investments zoom to fresh 2-yr high in FeB
EXPECTATIONS OF A RATE cut BUOYING SENTIMENT

Foreign direct investments zoom to fresh 2-yr high in Feb

/ 02:09 AM May 13, 2024

Foreign direct investments (FDI) in the Philippines hit a new two-year high in February, as the mild uptick in inflation builds the case for an interest rate cut this year, which would bode well for investment plans.

FDIs posted a net inflow of $1.4 billion, up by 29.3 percent compared with a year ago, according to the latest data from the Bangko Sentral ng Pilipinas (BSP).

Unlike the so-called “hot money” that enters and leaves markets with ease, FDIs are firmer capital inflows that generate jobs for people. That said, the government wants existing FDIs to stay, while attracting new ones.

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A net inflow means more of this job-generating foreign capital entered the country against those that left during the period. Data showed the February FDI was the highest since December 2021, when net inflows stood at $2.7 billion.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said last month’s FDI net inflow was boosted by growing investor hopes for a rate cut this year as inflation—while on an uptrend—was still within the government’s 2 to 4 percent target range. —Ian Nicolas P. Cigaral INQ

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