‘PH to sustain foreign investment inflow in 2017’

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BSP cites young population, sound macroeconomic fundamentals

The central bank sees continued inflow of foreign direct investments (FDI) into the Philippines in 2017 as the country remains an attractive destination for investors given its young population, vibrant industry sectors and solid macroeconomic fundamentals.

FDI inflow “is going to continue, given the [country’s] sustained economic growth, which is broad-based.
Manufacturing, for instance, is picking up again in addition to the usual sources of growth, like services—this will continue to be an attraction,” Bangko Sentral ng Pilipinas (BSP) Governor Amando Tetangco Jr. said.
Tetangco did not give a forecast figure for FDI this year.

“There is a huge market that can be tapped here in the Philippines. Remember we have an average age of 23.9 years or so, one of the youngest in the region, and foreign investors are taking a closer look at what are the opportunities here, given that we have a growing economy, young and economically active population, and sustained macro-economic conditions,” Tetangco said.

The Philippines received a net FDI inflow of $7.93 billion in 2016, up 40.7 percent from $5.63 billion in 2015 and surpassing the $6.7 billion projection made for last year by the BSP by 18.4 percent.

BSP Deputy Governor Diwa Guinigundo said last year’s data highlights an important core factor—“that foreign direct investors are taking a more sanguine, a more confident attitude toward the Philippines.”

“So their decision to invest in the Philippines – not portfolio [or hot money], but direct investments, means that they have studied the macroeconomy, the fundamentals. And they have made the decision that it is worth investing in the Philippines…. so they are more serious investors,” he added.

Guinigundo echoed Tetangco’s optimism that the Philippines will continue to see higher FDI for 2017.

“We have not seen any evidence that the Trump administration has restricted business from coming into emerging markets, including the Philippines,” he said. “I don’t think that FDI will be affected, even BPOs [business process outsourcing].”

Last week when the BSP released the 2016 data on foreign direct investment, the Board of Investments (BoI) said business activity in the country reflected sound macroeconomic fundamentals and the optimism and confidence of local international investors.

The foreign investment level in the second semester of last year was almost double than that of the first semester, “clearly indicating the growing foreign investors’ confidence in the country’s sound economic policies, and attractive business environment,” Trade Secretary and BoI Chairman Ramon Lopez said.

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