NextGen Day

Even though FDIs to the Philippines fell 30.7 percent year over year in March 2023 to USD548 million, the lowest in two months, an economist remains confident about the rebound of FDIs.

The latest FDI level was attributed by the Bangko Sentral ng Pilipinas (BSP) on Tuesday to the overall drop of all FDI components “amid investor concerns over subdued global growth prospects.”

Michael Ricafort, the chief economist at Rizal Commercial Banking Corp. (RCBC), stated that he thinks that the full reopening of the economy, sustained recovery of domestic output, deceleration of inflation rate, eventual cuts in the key rates of the central bank, and the Philippines’ membership in the Regional Comprehensive Economic Partnership (RCEP), the largest free trade agreement in the world, are factors that would help increase FDIs.

Following the banking-related problems in the US during that time, notably, the bank failures involving Silicon Valley Bank, Signature Bank, and First Republic Bank, he linked the decline in FDIs in March to risk aversion.

However, according to Ricafort, “These worries have already subsided in recent weeks as a result of the prompt action taken by US authorities to guarantee the deposits of these banks.”

According to the BSP, the manufacturing, information and communications, and real estate sectors received the majority of equity capital investments in March from Singapore, Japan, and the United States.

Nett’s FDI for the first quarter of this year was USD2.04 billion, which is a 19.6% decrease from USD2.54 billion for the same period in 2022.

Despite this development, Ricafort claimed that FDI inflows to the country have continued to rise because of the nation’s favorable demographics, the investment commitments made during the president’s and his top government officials’ overseas trips, and the adoption of significant economic reforms like the Corporate Recovery and Tax Incentives for Enterprises Act (CREATE Act).

Additional support for FDIs is anticipated from the continuing increase in government spending on infrastructure, which increased to roughly 5% of domestic output under the Duterte administration from about 3% of GDP under previous administrations.

“Continued affirmation of the country’s investment grade ratings for the third year in a row, at one to three notches above the minimum investment grade, would still help attract more/bigger roster of foreign investments/FDIs and credit facilities at better terms into the country, attesting to improved credit and economic fundamentals in recent years/decades,” Ricafort said.

However, he continued, these variables are considered as being offset by the still high inflation rate, both domestically and abroad, the increases in central banks’ key interest rates, and the potential for a US recession.

Save/Share this story with QR CODE

---

Disclaimer

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.

📩 Need to get in touch?

📩 Feel free to Contact NextGenDay.com for comments, suggestions, reviews, or anything else.

---

We appreciate your reading. 😊Simple Ways To Say Thanks & Support Us:
1.) ❤️GIVE A TIP. Send a small donation thru Paypal😊❤️
Your DONATION will be used to fund and maintain NEXTGENDAY.com
Subscribers in the Philippines can make donations to mobile number 0917 906 3081, thru GCash.
3.) 🛒 BUY or SIGN UP to our AFFILIATE PARTNERS.
4.) 👍 Give this news article a THUMBS UP, and Leave a Comment (at Least Five Words).

---

AFFILIATE PARTNERS

World Class Nutritional Supplements - Buy Highest Quality Products, Purest Most Healthy Ingredients, Direct to your Door! Up to 90% OFF.
Join LiveGood Today - A company created to satisfy the world's most demanding leaders and entrepreneurs, with the best compensation plan today.

---