The central bank revised its forecast for net foreign direct investments (FDI) this year up by $1 billion on perceptions of improving local economic indicators and global economic prospects.
“Foreign direct investments in 2017 are projected to be higher than what was previously forecast,” Bangko
Sentral ng Pilipinas (BSP) Department of Economic Research Director Zeno Ronald Abenoja said.
The net FDI inflow for 2017 is seen hitting $8 billion in 2017, an upward revision to the $7 billion projected for the period initially.
The latest forecast by the Bangko Sentral ng Pilipinas (BSP) is also wider than the full-year 2016 net FDI inflow of $7.9 billion.
For January to March this year, official data showed net cumulative FDI inflow of $1.56 billion.
Abenoja said the BSP’s key considerations in the 2017 FDI projection were the “recovery of the manufacturing
sector and sustained growth in the services sectors, as well as the implementation of the PPP [public-private partnership] projects awarded in previous periods.”
“This is also in line with the expected improvement in global economic conditions relative to 2016,” he added.
In April, the manufacturing sector in terms of the Volume of Production Index (VoPI) rose 5.9 percent, while the Value of Production Index (VaPI) increased 3.7 percent.
In the first quarter of 2017, the services sector continued to be the main driver of economic growth, registering 6.8 percent.
Meanwhile, the PPP Center said construction of several PPP projects in the Philippines that have been awarded to private partners are now in progress.
Projects under construction are the Mactan-Cebu International Airport New Passenger Terminal Building, the Southwest Integrated Transport System Project, MRT Line 7, Bulacan Bulk Water Supply Project, Civil Registry System – Information Technology Project (Phase II), PPP for School Infrastructure Project – Phase II, and the Metro Manila Skyway Stage 3.
To date, the government awarded 15 PPP contracts to the private sector.
The BSP also took into consideration the upward revision by the International Monetary Fund of its global growth outlook to 3.5 percent this year.
“So the push and pull conditions are seen being favorable in terms of the FDI inflow,” Abenoja added.
The BSP official said these potential FDIs are expected to be channeled to the following sectors: manufacturing, particularly electronic and motor parts; utilities, including the renewable energy and water works; real estate; entertainment; financial and insurance activities; and wholesale and retail trade.
“These are based on the 2017 investment priorities plan, as well as the approved foreign investments provided by various investment promotion agencies,” Abenoja explained.