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Experts predict a steady increase in FDI to the Philippines.

An economist predicts that foreign direct investments (FDIs) in the Philippines will increase even more with the reopening of the economy and the investment promises obtained from President Ferdinand R. Marcos Jr.’s numerous international tours.

FDIs reported net inflows of PHP1.05 billion in February 2023, up 13% from the USD926 million in the same month last year, according to data made public by the Bangko Sentral ng Pilipinas (BSP) on Wednesday.

According to Michael Ricafort, chief economist of Rizal Commercial Banking Corporation (RCBC), the most recent amount of net FDI is among the greatest since the epidemic began.

The Philippines’ economic/GDP growth is anticipated to be among the fastest in the region, the country’s attractive demographics, China’s economic reopening since December 2022, and investment commitments obtained by the administration from overseas visits/trips, among other factors, suggest that net FDIs could increase in the upcoming months.

As the largest free trade agreement in the world, the Regional Comprehensive Economic Partnership (RCEP), includes the Philippines, Ricafort claimed that this “would help attract more FDIs to locate in the country as a production and/or marketing base, as well as an access point to bigger export markets of the other RCEP member countries in the region and in other parts of the world.”

Additionally, he added, “the recent passage of reform measures, particularly the CREATE (Corporate Recovery and Tax Incentives for Enterprises Act) law, which reduces the corporate income tax by at least 5 percentage points (from 30 percent) retroactive to July 2020 and provides greater certainty on investments, will also help attract more FDIs to be more decisive and locate in the country.

The Public Services Act, Foreign Investments Act, and Retail Trade Liberalisation Act, among others, are reforms and modifications that, according to Ricafort, “would all further encourage and attract more FDIs into the country.”

More reforms and policies that are friendly to business and investments, as well as improved governance, anti-corruption, and ESG (environmental, social, and governance) standards, have been encouraged and even required by some regulators worldwide as part of the requirements/criteria before investing, would all help further boost more FDI into the country.

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This article is for informational purposes only and does not constitute endorsement of any specific technologies or methodologies and financial advice or endorsement of any specific products or services.

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