NextGen Day

Given the continuous improvement of local fundamentals, an economist predicts continued growth in foreign direct investments (FDIs) to the Philippines.

The Bangko Sentral ng Pilipinas (BSP) said on Thursday that foreign direct investments into the Philippines increased by 96 percent year on year to USD1.1 billion in November 2021. The net inflows for the first eleven months of the year totaled USD9.2 billion, up 52.5 percent year on year.

According to research by Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, FDIs are still one of the bright spots for the local economy’s recovery, owing to their double-digit growth in recent months.

According to Ricafort, the USD7.3 billion in FDI in November 2021 is the most since September of last year.

He expects continuing good FDI growth to “lead to more business/economic activity, as well as the creation of additional jobs/employment as the economy reopens further toward greater normalcy,” he stated.

“As a result, FDIs remain one of the bright spots and one of the major pillars of the Covid-19 (coronavirus disease 2019) economic recovery program,” he added.

Aside from the economy’s continued reopening, Ricafort cited other factors that drive FDI inflows, such as increased exports, remittances from overseas Filipino workers (OFWs), manufacturing, and employment, as well as the passage of the CREATE law, the Retail Trade Liberalization Act, amendments to the Public Services Act, and the Foreign Investments Act.

“Near-record low short-term interest rates, combined with a recent rise in local/global long-term interest rates, have prompted more global companies to be more aggressive in borrowing and other fund-raising activities to finance new investments and expansion projects, including more FDI into the Philippines,” he said.

To help buffer the local economy from the impact of the pandemic, the Bangko Sentral ng Pilipinas (BSP) reduced its key policy rates by a total of 200 basis points in 2020.

BSP’s overnight reverse repurchase (RRP) rate is currently at a record low of 2%.

Governor Benjamin Diokno of the BSP has pledged to keep the central bank’s key interest rates at their current levels for as long as required to aid the economy’s recovery.

Apart from these considerations, Ricafort stated that “possible membership of the country in the Regional Comprehensive Economic Partnership (RCEP), the world’s largest free trade agreement, would help attract more FDIs to locate in the country as a production and/or marketing base, as well as an access point to larger export markets of the other RCEP member countries.”

“Improved foreign policy/relations with major sources of foreign investment for the new Philippine President after the May 2022 elections would also help boost more FDIs into the country, especially with more reform measures and policies that are friendly to business/investments, as well as improved governance/anti-corruption/ESG (environmental, social, and governance) standards that have been encouraged and even required by some regulators worldwide as part of the requisitioning process,” says the report.

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.

---