MANILA, Philippines – The Bangko Sentral ng Pilipinas (BSP) sees more foreign direct investments (FDIs) flowing into the country next year amid the country’s strong macroeconomic fundamentals and the implementation of much needed infrastructure projects under the public private partnership (PPP) scheme.
BSP Department of Economic Statistics director Zeno Ronald Abenoja said FDI inflows are expected to hit $6.3 billion next year from the projected $6 billion this year.
“This is line with the sustained positive developments in the domestic economy and some improvement in the global economic conditions as well as the implementation of PPP projects that were awarded in 2014 and 2015,” Abenoja said.
He added the FDIs would be channeled to manufacturing; electronics and motor parts; utilities like renewable energy and water works as well as real estate and entertainment.
Abenoja said the BSP sees FDI inflows rising to $6 billion this year from $5.5 billion last year.
Abenoja explained the bullish business confidence is expected to support the continued entry of FDIs despite the fact the global financial environment is expected to remain volatile.
“We see FDIs reaching $6 billion this year, which is the same level that we initially projected in May. This continued inflow in FDIs reflects the bullish business confidence that we are observing right now,” he said.
Latest data from the central bank showed a record $1.52 billion FDIs flowing into the country last September. This brought the net FDI inflow to $4.54 billion in the first nine months, 5.5 percent lower compared to $4.8 billion in the same period last year.
Equity capital investments reached $1.4 billion on account of the 38.1 percent increase in gross placements to $2.2 billion, which exceeded withdrawals amounting to $789 million.
Equity infusions emanated largely from the US, Japan, the United Kingdom, the Netherlands, and Singapore and were channeled mainly to manufacturing; financial and insurance; real estate; wholesale and retail trade; and construction activities.
Abenoja also cited the sustained economic expansion in the Philippines as the country has booked 67 straight quarters of gross domestic product (GDP) growth.
The country’s GDP growth accelerated to six percent in the third quarter of the year from the revised 5.8 percent in the second quarter amid robust domestic demand and improving government spending.
“That is being supported by positive developments in the domestic economy, and the implementation of various PPP projects approved in recent quarters by the national government,” he said.
For his part, BSP Deputy Governor Diwa Guinigundo said strong FDI inflows particularly in PPP projects are crucial in maintaining the momentum in the country’s continued economic expansion.
“We expect that FDIs will continue to grow. This is very important in sustaining economic momentum in the Philippines,” he said.
The country’s balance of payments (BOP) position is expected to post a surplus of $2.2 billion next year from $2 billion this year due to sustained leads from the exports of goods and services, cash remittances from Filipinos abroad, and higher FDI inflows.
“While the global economic outlook in 2016 is expected to improve slightly, uncertainty and caution still remain. Nevertheless, the Philippine economy is expected to exhibit continued resilience on the back of strong domestic economic activities,” Abenoja said.
23 December 2015
By Lawrence Agcaoili