Foreign investments likely to grow—BSP
BANGKO Sentral ng Pilipinas will likely revise upward its net inflow target of $7 billion this year for foreign direct investments after the 2016 figure reached a record $7.9 billion, a senior official said.
“The surge of FDI last year showed investors’ more confident attitude towards the Philippines,” Bangko Sentral Deputy Governor Diwa Guinigundo told reporters. “Their decision to continue to invest here also showed the steady strong fundamentals of the Philippine economy.”
“We will continue to see higher FDI for 2017. If you look at the way the economy and business policies of the Trump administration, it’s clear that there are yet no policies that will restrict the coming in of American investors in the Philippines,” he said.
Guinigundo expressed optimism FDI inflows would not be affected by Trump’s policies, including those in the business process outsourcing industry, which remained one of the growth drivers of the economy.
“We have not seen any evidence that the Trump administration has restricted businesses from coming to emerging markets including the Philippines,” Guinigundo said.
The FDI net inflow of $7.9 billion last year surpassed the target of $6.7 billion. The 2016 figure was also 40.7 percent higher than a year-ago level of $5.72 billion net inflow.
FDI net inflow in December amounted to $669 million, more than double the $272 million recorded year-on-year.
More than half, or $415 million, of the net inflows during the month were non-resident affiliates’ net placements in debt instruments issued by resident affiliates (or intercompany borrowings).
Net equity capital infusion reached $206 million, as equity capital placements of $294 million more than offset the $88-million withdrawals. Equity capital placements came mostly from Hong Kong, Japan, the United States, Singapore and Belgium.
These were channeled mainly in arts, entertainment and recreation; financial and insurance; manufacturing; real estate; and professional, scientific and technical activities. Meanwhile, reinvestment of earnings amounted to $47 million during the month.
“FDI inflows remained robust, supported by strong investors’ confidence in the country’s solid macroeconomic fundamentals,” the regulator said.
Net availment of debt instruments rose 68.6 percent to $5.2 billion from $3.1 billion in 2015. Equity capital investments, meanwhile, posted net inflows of $2 billion, 12.1 percent higher than $1.8 billion recorded last year.
Placements of $2.7 billion outweighed withdrawals of US$643 million. Equity capital placements originated mainly from Japan, Hong Kong, Singapore, the United States, and Taiwan.