MANILA – The Bangko Sentral ng Pilipinas (BSP) reported on Monday the net foreign direct investments (FDIs) to the Philippines reached USD876 million last April.
Central bank data showed that the latest net FDIs were higher than the USD548 million net inflows last March but 14.1 percent lower than USD1 billion net inflows last year.
Bulk of the investments amounting to USD663 million are placements in debt instruments. This amount is, however, 7.7 percent lower than USD719 million the previous year.
During the same period, net equity other than reinvestment of earnings amounted to USD136 million, down from USD206 million in 2022.
Reinvestments of earnings also slipped year-on-year to USD77 million from USD95 million during the same period last year.
In the first four months this year, net FDI inflows amounted to USD2.9 billion, 18 percent contraction from USD3.6 billion.
Despite the year-on-year drop in net FDIs in the country, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a report, remains optimistic about its rise in the coming months.
He attributed the month-on-month rise in net FDIs to easing concerns on the health of US’ banking system, which faced some issues after the bank failures last March, which saw the closure of regional banks Silicon Valley Bank (SBV), Signature Bank, and First Republic Bank.
Ricafort said the challenges were addressed after US regulators stepped in to prevent a contagion, which also limited the issues’ impact on the global environment.
“For the coming months, net FDIs could pick up further amid easing trend in inflation and in global commodity prices that reduce the cost of FDIs, as well as the eventual easing of interest rates especially into 2024 as expected by the markets,” he said.
Ricafort added that the continued reopening of economies, as well as the projected solid expansion of the domestic economy, are expected to attract more FDIs to the Philippines.
He said demographics, with a large working-age population, is also another advantage for the Philippines, along with the reopening of the Chinese economy, which is the second largest economy in the world and a major trading partner of the Philippines.
Other factors that are seen to attract more investments to the country include the investment commitments from the various trips of President Ferdinand R. Marcos Jr. and his economic team overseas, as well as the inclusion of the Philippines in the world’s largest free trade agreement --the Regional Comprehensive Economic Partnership (RCEP), he added. (PNA)
