BUDGET Secretary Benjamin Diokno expressed optimism the net inflow of foreign direct investments this year will surpass the record $10-billion last year, given the country’s sustained strong macroeconomic fundamentals coupled with measures implemented by the government in attracting more investors.
“We will be much higher than the $10 billion last year. The global FDI is declining but the Philippines’ FDI is increasing… ,” Diokno said in a briefing Wednesday.
He said the 52-percent growth in FDI net inflow in the first seven months of 2018 year-on-year was an indication that the numbers at the close of the year could be more robust.
Diokno also said the bill redefining public service would help increase the entry of more foreign direct investments in the country in the months ahead.
President Rodrigo Duterte in late October signed Executive Order 65 that promulgated the Eleventh Regular Foreign Investment Negative List or RFINL.
Economic Planning Secretary Ernesto Pernia said the latest development would help raise the country’s competitiveness, and allow the Philippines to be closer to parity with other member-states of the Association of Southeast Asian Nations by opening up more areas for foreign investment into the country, especially those that will introduce new technology and stimulate innovation.
Pernia noted during the recent Philippine Economic Briefing in London that the Philippines was one of the most restrictive countries in Asean in terms of foreign direct investments.
The 11th RFINL reflects amendments in existing laws, such as the reciprocity provisions in certain laws on professions like pharmacy and forestry, limitations on foreign participation in investment areas provided in new laws, and exclusions from limitations on foreign participation in some investment areas identified that do not need legislative action.
Net inflow of foreign direct investments in July rose 166 percent to $914 million from $344 million a year ago as investors continued to view the Philippines as one of the best places to invest in.
Data from the Bangko Sentral ng Pilipinas showed that the August net FDI was also higher than the $831-million net inflow a month ago. This brought the net inflow first seven months to $6.7 billion, up 52 percent from $4.4 billion on year.
Over 60 percent of FDI net inflows in July were in the form of non-residents’ investments in debt instruments issued by local affiliates (intercompany borrowings), which expanded to $584 million from $136 million in the same period last year.
Net equity capital investments rose 90 percent to $261 million from $137 million in 2017 due to the 60.6-percent increase in equity capital placements to $278 million coupled with the decline in withdrawals by 52 percent to $17 million.