FOREIGN businessmen are still reluctant to bet on the Philippines, as the latest data released by the Bangko Sentral ng Pilipinas (BSP) on Tuesday showed that foreign direct investment (FDI) inflows into the country again contracted in June.
Figures from the BSP revealed that FDI posted a net inflow of $430 million in June, 48.5 percent lower than the $836-million net inflows recorded in the same month last year. FDI inflows have declined for the fourth consecutive month in June.
FDI is the type of investment that is often more coveted, as it stays longer in the economy and creates job opportunities for locals.
Data from the BSP showed that nonresidents’ investments in debt instruments, or lending by foreign companies abroad to their local affiliates to fund existing operations and business expansion, registered lower net inflows of $317 million, from $570 million.
Also, nonresidents’ net investments in equity capital fell to $25 million from last year’s $184 million.
These equity capital placements during the period came mostly from Singapore, the United States, Japan, the Netherlands and China and were channeled mainly to real estate, manufacturing, financial and insurance, electricity, gas, steam and air-conditioning supply, and transportation and storage industries.
The BSP also said reinvestment of earnings expanded by 8.3 percent to $89 million from $82 million in the same month last year.
Earlier, ING Bank Manila economist Nicholas Antonio Mapa said recent FDI flows have not been as “substantial,” as investors await the fate of the proposed Corporate Income Tax and Incentive Rationalization Act (Citira).
Just this Monday, the House of Represen-tatives approved Citira on second reading.
Through viva voce voting, lawmakers greenlighted House Bill 4157, which amends sections of Republic Act 8424 or the National Internal Revenue Code of 1997.
The bill will be approved on third and final reading on Thursday. In the first six months of the year, the BSP said FDI to the Philippines recorded net inflows of $3.6 billion, 38.8 percent lower than the $5.8 billion recorded in the first semester of last year.