Continued growth in foreign direct investment (FDI) reflects strong global confidence in the Philippines’ economic fundamentals and policy direction, according to Manulife Investment Management.
Manulife fixed income head Jean de Castro said sustained FDI inflows could help deepen liquidity, increase portfolio investments into local bonds, attract more long-term investors and support overall market stability.
Net FDI in May reached $586 million, up 21.3 percent from a year earlier, based on the latest data from the Bangko Sentral ng Pilipinas.
“Enhanced confidence in the Philippines also supports demand for local currency debt, which can help anchor yields and improve market resilience,” de Castro said.
De Castro said that following the Bangko Sentral ng Pilipinas’ (BSP) decision to cut its policy rate by 25 basis points to 5 percent in August, short-term bonds may benefit from the immediate impact of easing. “The BSP’s rate cut last Aug. 28 provides immediate support to short-term bonds, as yields at the front end of the curve tend to adjust quickly to policy changes,” she said.
