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Bangko Sentral to update target for investments

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The Bangko Sentral ng Pilipinas is optimistic the country’s sustained strong macroeconomic fundamentals will attract more foreign investments this year.

“We are confident that in 2019, with inflation down, sustained government spending, with consumption expenditure being resilient and robust, we should see more investments coming in,” Bangko Sentral Deputy Governor Diwa Guinigundo said in an interview Monday.

He said the central bank was reviewing the economic assumptions it announced earlier, including the targets on net foreign direct investments and foreign portfolio investments or hot money.

“We are reviewing this for the April and May cycle. So we will be announcing our new target for 2019 and 2020,” he said.

FDI net inflows increased 1.8 percent in the first 10 months of 2018 to $8.5 billion from $8.4 billion a year ago. Net investments in debt instruments grew 18.6 percent to $5.9 billion, while reinvestment of earnings rose 2.3 percent to $677 million.

Net investments of equity capital declined to $2 billion from $2.8 billion in January to October 2017. Equity capital placements during the period came largely from Singapore, Hong Kong, the United States, Japan, and China. 

These were infused in manufacturing, financial and insurance, real estate, arts, entertainment and recreation, and electricity, gas, steam and air-conditioning supply activities.

Data showed that in October 2018, net inflows of foreign direct investments fell 74 percent to $491 million from $1.9 billion a year ago, pulled down by lower investments of equity capital for the period.

The Bangko Sentral said investments of equity capital for the month reached $98 million, lower than the year-ago level of $1.5 billion mainly because of a big ticket investment in October 2017. 

The Bangko Sentral said it was expecting a record net inflow of foreign direct investments in 2018, higher than the $10-billion net inflow in 2017, as the country’s macroeconomic fundamentals remained solid and strong.

It said the FDI net inflow could have reached $10.4 billion in 2018, higher than the actual $10 billion posted in 2017. 

Meanwhile, hot money posted a net inflow of $1.2 billion in 2018, an improvement from the $195-million net outflow in 2017, buoyed by the passage into law of the Tax Reform for Acceleration and Inclusion.

Finance Secretary Carlos Dominguez III said President Rodrigo Duterte made the country a safer place for investors, with his campaign against corruption and criminality leading to a decrease in crime volume by 21.86 percent since the start of his administration.

Dominguez also said the increasing volume of FDIs supported the Duterte administration’s efforts to shift the economy from consumption- to investments-led growth, which would then help create decent, well-paying jobs for the young and well-trained Filipinos entering the workforce.

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