Foreign direct investments (FDI) will continue to grow this year, the Bangko Sentral ng Pilipinas (BSP) said on Tuesday, given positive developments that are expected to even higher inflows next year.
After recently announcing downward revisions to expected remittances, dollar reserves and other macroeconomic forecasts for the year, the central bank said it was keeping its 2015 net FDI inflow projection at $6 billion, an increase from the $5.5 billion recorded in 2014.
“We see FDI reaching $6 billion this year, which is the same level that we initially projected in May,” said Zeno Ronald Abenoja, director of the central bank’s Department of Economic Research.
“[T]his continued inflow in FDI reflects the bullish business confidence that we are observing right now,” he added.
Supporting the inflows are developments in the domestic economy and the implementation of various public-private partnership (PPP) projects, Abenoja claimed, with funds channelled to the manufacturing, electronics and motor parts, renewable energy and waterworks, real estate and and entertainment industries.
For 2016, the central bank expects net FDI to expand to $6.3 billion.
“This is line with the sustained positive developments in the domestic economy and some improvement in global economic conditions as well as the implementation of PPP projects that were awarded earlier in 2014 and 2015,” Abenoja said.
The state agency in charge of PPPs has said that at total of 55 PPPs are in the pipeline, of which 10 have been awarded and two up for contract signing.
Sixteen projects, meanwhile, have been approved by the National Economic and Development Authority Board, while the remaining are in various pre-approval stages.
Last week, the central bank said it had adjusted a number of macroeconomic projections, including those for several balance of payment components and trade.
Among others, Philippine exports are now expected to contract by 4 percent this year instead of growing by 5 percent, while imports will likely post zero growth instead of expanding by 1 percent.
The growth forecast for cash remittances from migrant Filipinos was trimmed to 4 percent from 5 percent, and gross international reserves are subsequently expected to hit $80.7 billion, instead of $81.6 billion, by yearend.
Factors cited as having prompted the revisions were global uncertainties, capital outflows and a stronger dollar.