The Philippines’ investment prospects remain particularly favorable but reforms are needed to lure more foreign businesses, the Bangko Sentral ng Pilipinas (BSP) said.
“There is a huge potential in attracting further FDIs (foreign direct investments), which can put the country at par with the large levels of FDI seen in neighboring Asian countries,” it said in a statement on Thursday.
The central bank was reacting to concerns over a decline in foreign investments and after reporting earlier this week that net FDI for July was the lowest in over a year.
The country’s investment potential, the BSP said, can be realized by reforming rules on foreign ownership, addressing infrastructure gaps and reducing the cost of doing business, which will require considerable government support.
“For the BSP, among the measures taken to promote a more supportive environment for higher foreign investments have been the liberalization of foreign bank entry in the country as well as the phased-in liberalization of the foreign exchange regulatory framework that started In 2007,” it noted.
The BSP said it would continue to promote an enabling environment for investments to thrive in line with its primary mandate of maintaining price and financial stability.
On Tuesday, the central bank reported that at $307 million, the net FDI inflow for July was 37.9 percent lower compared to the same month last year and was also the smallest since June 2016’s $238 million.
July’s slump weighed on net FDI flows for the first seven months of 2017, which fell by 16.5 percent — steeper compared to the first semester slump — to $3.9 billion from a year earlier.